Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — FOREIGN AND COMMONWEALTH AFFAIRS

Soviet Foreign Secretary (Discussions)

Mr. Blaker: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about his recent discussions with Mr. Gromyko.

The Secretary of State for Foreign and Commonwealth Affairs (Mr. James Callaghan): I would refer the hon. Member to my right hon. Friend the Prime Minister's Written Answer to the Question put down by my hon. Friend the Member for Edmonton (Mr. Graham) on 25th March.

Mr. Blaker: The right hon. Gentleman will be aware that the Soviet leaders have expressed the view that in spite of detente the war of ideas should continue in the Communist and democratic worlds, and I believe that the Foreign Secretary himself has supported this thesis. Did Mr. Gromyko have any suggestions about how the war of ideas should be conducted inside the Soviet Union, apart from importing 40 copies of the Financial Times?

Mr. Callaghan: We were engaged in improving relationships with the Soviet Union in trade and other matters, and I do not believe that a discussion of that sort would have helped that end any more than I would have welcomed a discussion on similar matters in this country.

Mr. Sproat: asked the Secretary of State for Foreign and Commonwealth Affairs what discussions he had with Mr. Gromyko regarding the implementation of the Helsinki Agreement.

Mr. James Callaghan: I had a useful discussion on this subject with Mr. Gromyko. I made it clear to him that in our view all those countries which were party to the Final Act of the Conference on Security and Co-operation in Europe should aim to make progress in advance of the 1977 review meeting towards making their deeds match their words. Mr. Gromyko affirmed to me the Soviet Union's commitment to implementation of the Final Act.

Mr. Sproat: Will the right hon. Gentleman tell the House whether Mr. Gromyko made clear how he reconciled the Soviet signing of the Helsinki Agreement with the Soviets' flagrant breaches of the spirit of Helsinki, the continuing persecution of their own citizens within their own borders, the massive and continued growth of the Red Navy and the supplying of arms and military advisers to Southern Africa?

Mr. Callaghan: The hon. Gentleman was one of those who was keenest on our signing this pact. I well remember the constructive speeches that he used to make only four months ago. I do not know why he imagines that the world will be reformed overnight. Frankly, it will not help if it is thought that one party in the House is constantly nagging on this matter. Nagging is not the best way of making progress. At the moment all we are getting from the Conservative Party is that sort of approach towards the Soviet Union. I suggest that the hon. Gentleman asks his party's spokesman what he made of the discussions that he had with Mr. Gromyko when he met him.

Mr. Frank Allaun: I cannot say that I voted for my right hon. Friend, but I very much support the view that he has just expressed. Did the two Foreign Secretaries discuss the offer that was made by Mr. Brezhnev last March for ending the East-West deadlock by the mutual reduction of forces and by a reduction of tanks, aircraft and nuclear weapons? If there is some suspicion about the offer, why not put it to the test?

Mr. Callaghan: I remind my hon. Friend of the parable of the Prodigal Son, although I cannot promise him a fatted calf.
As regards disarmament, yes, I had a very useful exchange of views with Mr. Gromyko about the forthcoming Vienna discussions. There is a difference of approach between the Soviet Union and ourselves about the value of the offer that was made by the West in December. Mr. Gromyko and I were not able to reconcile that difference during the course of our discussions. However, I think it is fair to say that both sides wish to pursue this difficult matter in earnestness. I am convinced that the Soviet Union wishes to make a success of the talks, but when we are discussing mutual safety and our own security it is natural that such matters should take some considerable time.

Mr. Maudling: Is the right hon. Gentleman aware that during the discussions that I and my right hon. Friends had with Mr. Gromyko we stressed the acute concern in this country about the growth of Soviet armed forces, especially naval forces, and our concern about the Cuban incursion into Southern Africa with Soviet support? Is he aware that in particular we stressed the genuine nature of the concern in this country about the treatment of many individual Soviet citizens within the Soviet Union, especially Jewish citizens? Did the right hon. Gentleman do the same? If not, why not?

Mr. Callaghan: I shall not go into details about our discussions. It is not the customary practice to do so. If the Conservative Party was being a little more responsible, it would know that. The right hon. Gentleman knows that I made my views clear on these matters to Mr. Gromyko, and on many other matters as well. I am complaining about the attitude of the Conservative Party that leads to the querulous nagging that goes on week by week. I advise the Conservative Party that it will not get results in that way from the Soviet Union.

Mr. Roy Hughes: Does my right hon. Friend agree that one of the fruits of détente is the increasing trade with the Soviet Union that the Prime Minister announced a week or so ago, trade that will be highly beneficial to the British economy besides helping to reduce our unemployment? Does my right hon. Friend agree that trade of that sort is

a highly excellent means of improving relationships between the two countries?

Mr. Callaghan: Yes. Mr. Gromyko made it clear that the Russions hope in the near future to use all the credits that have been made available to them. That will help to provide substantial employment in Britain. However, I do not think that such credits or such trade can be restricted to the Soviet Union. The same rules should be applied to other countries with whose policies we do not fully agree.

Mr. Amery: May we assume that the Foreign Secretary and the Prime Minister made it clear to Mr. Gromyko that we expect the Soviet forces and their Cuban satellites to withdraw bag and baggage from Angola? What response was made by Mr. Gromyko, and in what time-scale can we expect that withdrawal?

Mr. Callaghan: I am not aware of Soviet troops being in Angola, and I do not think the right hon. Gentleman is either. We discussed the presence of Cuban troops, and we were both able to act as useful channels of communication between Angola and South Africa. That had the effect of considerably reducing tension. I found that Mr. Gromyko's approach to this matter was designed to reduce tension and to ensure that there was no way in which the situation in South Africa would get out of control.

Mr. Heffer: Does my right hon. Friend agree that the approach that the Conservative Opposition have adopted towards the Soviet Union is totally hysterical, is doing no good, and is not helping those forces in the Soviet Union which want to move the Soviet Union in a more democratic direction? Does he agree that there are forces in the Soviet Union which are not like Solzhenitsyn but like Roy Medvedef—namely, democratic Socialists who believe in the type of Socialism in which we in the Labour Party believe, people who are not given to the hysterical attitudes adopted by the Opposition or by Solzhenitsyn?

Mr. Callaghan: My hon. Friend is fully entitled to speak on this matter. He has spoken out on many other occasions. It is for the Conservative Party to decide its own attitude, and no doubt Conservatives will do so.

Mr. Hastings: We do not like tyranny.

Mr. Callaghan: The Conservative Party is entitled to choose the way in which it conducts its relations with the Soviet Union, but I suggest that it says the same things in public as it says in private.

Hong Kong

Mr. Cryer: asked the Secretary of State for Foreign and Commonwealth Affairs when he next intends to visit Hong Kong.

The Minister of State for Foreign and Commonwealth Affairs (Mr. David Ennals): My right hon. Friend announced on 29th October that he was planning a visit to the Far East, including Hong Kong.

Mr. Cryer: When my right hon. Friend goes to Hong Kong will he ensure that gross exploitation in the colony is ended and that legislation such as the Employment Protection Act which applies in this country also applies there? Until then will be ensure that the products of exploitation, particularly textile products, are not allowed into this country to put out of work people here who are under the protection of that Act?

Mr. Ennals: I cannot accept that there is gross exploitation in Hong Kong. There has been, as many hon. Members who have been to Hong Kong recently know, a great deal of progress. The Hong Kong Government have greatly increased the proportion of their expenditure this year—they are spending £100 million more than in the past year—on such things as social welfare, housing, health and education. Textiles are, of course, basically a matter for my right hon. Friend the Secretary of State for Trade, but I can tell my hon. Friend that as a result of the EEC-Hong Kong textiles agreement, in which we and other Community members are involved, a greater proportion of the increase in Hong Kong textiles is going to other parts of the Community, with, correspondingly less coming to Britain.

Mr. Townsend: Does not the right hon. Gentleman agree that British administrative ability and Chinese expertise in commercial affairs produce a highly successful combination? Would it not be

a good idea to meddle as little as possible in the affairs of a very successful colony?

Mr. Ennals: It is true that in comparison with most other countries in Asia the standards of living of the population of Hong Kong are very high. That is partly because of the people and partly because of the technical advice and aid they are able to get. As for interference, the British Government have a responsibility which is principally carried out through the Governor, in whom we have very great confidence.

Rhodesia

Mr. Brotherton: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Rhodesia.

Mr. Luce: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the latest developments in Rhodesia.

Mr. Whitehead: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement about recent events in Rhodesia.

Mr. Hooley: asked the Secretary of State for Foreign and Commonwealth Affairs what information he has about the progress of negotiations between Mr. Nkomo and Mr. Ian Smith.

Mr. Ennals: I would refer the hon. Members to the statement by my right hon. Friend on 22nd March about Rhodesia. As he said then, the talks between Mr. Nkomo and Mr. Smith have now been broken off.

Mr. Brotherton: Does not the right hon. Gentleman agree that by next Monday there will be an entirely different situation? Will he ask the right hon. Member for Cardiff, South-East (Mr. Callaghan) or, failing that, the right hon. Member for Ebbw Vale (Mr. Foot) to meet Mr. Smith at the earliest possible opportunity to make another effort to bring this long-drawn-out, shabby quarrel to a conclusion?

Mr. Ennals: I can assure the hon. Member that there will be a new situation next Monday, and, whatever occurs, I shall be delighted with the outcome.
Whoever is the Prime Minister and whoever is the Foreign Secretary, the policy on Rhodesia will remain precisely the same. My right hon. Friend the Foreign Secretary said that we would certainly be prepared to have discussions with Mr. Smith and others, but only when the conditions which my right hon. Friend presented to the House have been clearly carried out. As the hon. Member knows, so far the first instant reaction from Mr. Smith has been to say "No".

Mr. Ioan Evans: Does my right hon. Friend realise that, whatever the outcome of events on Monday, at least we shall be pleased that the future Prime Minister will represent a Welsh constituency? Will my right hon. Friend bear in mind that it has been the consistent and continuing policy of the Government that we should seek a peaceful solution, but that we should discuss continually with the presidents of the surrounding African States and ensure that we get majority rule as soon as possible?

Mr. Ennals: The principles stated by my hon. Friend are absolutely right. I am leaving London today for Dar-es-Salaam for talks with President Nyerere, who is the Chairman of the four Presidents. I hope also to go to Maputo for talks with the Mozambique Government.

Mr. David Steel: Could the Minister of State enlarge a little on the part of the Foreign Secretary's statement in which he hinted at possible aid to the European population, or those who might not wish to stay in a future developing Rhodesia? In view of President Nyerere's suggestions on the matter and the precedent in this country in the case of the Kenya settlers, will he tell us more about that?

Mr. Ennals: I do not want to go into great detail. My right hon. Friend indicated in his statement and when answering questions that the Government's view was that it was in the long-term interests of Rhodesia and co-operation between the races that the European population should remain there as equals within that society and that part of the proposals which we would put forward, if circumstances arose to negotiate rapid progress towards majority rule, would include certain aspects which would be of help to the European population. We have talked about the need for some kind of aid programme and for educational

assistance. We have also talked about the interests of civil servants, for instance, and their need for security and assurances, which we have in mind. It would be wrong to go into full details, but these matters are being carefully considered by my right hon. Friend and myself.

Mr. Luce: In view of the grave danger of increasing violence in Rhodesia, will the Minister ask the Secretary of State to persuade the European Heads of State this week to come out with a clear message to all who are interested in a peaceful solution in Southern Africa and in Rhodesia—that is, the four African Presidents, South Africa and particularly the Rhodesians—that, if they reach an early settlement, Europe, led by Britain, will do its utmost to facilitate a peaceful transition to independence?

Mr. Ennals: The agenda for the meeting to which my right hon. Friend will be going with the Prime Minister is for them. I should be surprised if these questions are not discussed. An important statement has already been made by the Community in terms of Southern Africa as a whole. It may be that the Heads of State will think it appropriate—if not this week, soon—to publish a statement on behalf of the Community specifically about Rhodesia.

Mr. Stonehouse: What reply has been sent to the appeal by Dr. Kaunda for British troops to be committed to maintain law and order during the transitional stage in Rhodesia? Has the Foreign Secretary made it absolutely clear that British troops will not be committed at any stage?

Mr. Ennals: A reply has not been sent to President Kaunda because that point was made in a statement. He has not addressed anything specifically to the Government. The Government's position is absolutely clear. We were not prepared to intervene militarily at the time of UDI in 1965. We would no more be prepared to intervene militarily today either to take action to support the minority against the majority or, as President Kaunda suggested, to arrest those who are now holding power. We believe that it must be done by negotiation.

Mr. Maudling: Despite the Minister's obvious intention to exercise a dual


mandate in a current contest, will he convey to the current Foreign Secretary the Opposition's disappointment at Mr. Smith's complete rejection of his proposals and our profound hope that the right hon. Gentleman will press forward in every possible way, despite the disappointments and difficulties, to try to find a solution to this desperately important British problem?

Mr. Ennals: I think that I indicated that, whatever my parliamentary colleagues may decide, they will produce a new Prime Minister of whom all of us can be proud.
To answer the serious part of the right hon. Gentleman's question, all who hope for a peaceful settlement in Rhodesia were saddened by the fact that Mr. Smith made his immediate and, I think, ill-considered rejection. I suppose that was not surprising, because some of the proposals required acceptance of a rapid transfer to majority rule. That is the precise issue on which the talks broke down. Therefore, it would be surprising if Mr. Smith, having made a statement on one day, took a quite different view a few days later. We hope that wisdom will prevail, that pressures will be brought to bear, and that the time will come when sense will be seen and a British rôle can in some way be resumed.

Mr. Hastings: rose—

Mr. Speaker: Order. This matter is to come up again.

Mr. Hastings: On a point of order, Mr. Speaker.

Mr. Speaker: Will the hon. Gentleman raise his point of order at the end of Question Time?

Mr. Hastings: It relates to this precise Question, Mr. Speaker.

Mr. Speaker: To raise a point of order now is only taking up Question Time.

Mr. Brocklebank-Fowler: asked the Secretary of State for Foreign and Commonwealth Affairs if he will take account of proposals for guaranteeing the future in an independent Rhodesia for the minority of whites who would wish to remain there in his formulation of policy on Rhodesia.

Mr. Ennals: I would refer the hon. Member to my right hon. Friend's statement of 22nd March in which he made clear that we looked for a settlement in Rhodesia which provided the kind of background that would enable both communities to live and work together.

Mr. Brocklebank-Fowler: Is it not clear that, now Mr. Smith has rejected the terms that were set out in the statement made in the House by the Foreign Secretary a few weeks ago, it is essential that the white minority in Rhodesia be assured as to its future prospects in that country after independence? Will the right hon. Gentleman amplify his earlier answer to the hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) and cause Mr. Nkomo's thoughts on adequate proposals for the future of the white minority in Rhodesia to be published in the Official Report?

Mr. Ennals: It is really for Mr. Nkomo to publish the record of the negotiations. I shall be surprised if he does not do so. When he publishes them, the hon. Gentleman will see the moderate and balanced proposals that he put forward. I shall not elaborate on the reply that I gave to the hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) for the reasons that I gave when answering him.
The hon. Gentleman referred to Mr. Smith's rejection. Over the years there have been many occasions when Mr. Smith has said one thing on one day and another on another day. We should be unwise to assume that we have necessarily heard the last word from Mr. Smith, or from others who may represent the Europeans. That is our hope.

Mr. Fernyhough: Does my right hon. Friend agree that the white minority interests will best be protected if they begin to lean a little more heavily on Mr. Smith and make him realise that he is at the end of the road and that for their own future Mr. Smith must go at once?

Mr. Ennals: There is much wisdom in what my right hon. Friend says. There is a responsibility on those Europeans in Rhodesia who recognise the folly of Mr. Smith's ways but who themselves wish to find a peaceful and just settlement in Rhodesia to speak up. Equally, it is the responsibility of hon. Members in all parts


of the House, especially members of the Conservative Opposition who have closer contacts with Mr. Smith than do others in the House, to speak up loud and clear now.

Mr. Cormack: Will the right hon. Gentleman ask the Foreign Secretary—and it is a pity that the Foreign Secretary did not reply to this Question—whether he will invite Mr. Smith to a conference in London, bearing in mind the dreadful consequences of the adoption of President Kaunda's suggestions? Because we want to prevent war, will he also consider the possibility of a Select Committee of this House going to Rhodesia, as Mr. Smith made a virtual invitation to such a Committee last week?

Mr. Ennals: No, I cannot accept that proposal. My right hon. Friend the Foreign Secretary has said that the purposes of a conference, which would be broadly representative, would be to discuss an orderly transfer to majority rule and the circumstances in which Rhodesia should move to independence. The moment for such a conference will come when Mr. Smith and others have recognised the basic principle. To step in at this stage, when Mr. Smith has explicitly denounced that principle, would make no contribution at all towards finding a solution.

Mr. Whitehead: Since we do not want to be drawn into the toils of further discussions with Mr. Smith, whatever changes may take place in the Foreign Office, is it not clear that we should have a continuous policy whereby the white community in Rhodesia is encouraged to come to talks with the British Government—although under the leadership not of Mr. Smith but of more reasonable men?

Mr. Ennals: I agree with my hon. Friend.

Southern Africa

Mr. Alexander Fletcher: asked the Secretary of State for Foreign and Commonwealth Affairs what steps he has taken to safeguard British interests in Southern Africa; and if he will make a statement.

Mr. Jessel: asked the Secretary of State for Foreign and Commonwealth

Affairs if he will make a statement on events in Southern Africa.

Mr. Ennals: Over the past few months we have become increasingly concerned about the dangers of a widening resort to violence in Southern Africa. We have been actively and continuously involved in the search for peaceful solutions to many problems of the region. On the central problem of Rhodesia, I would refer to my right hon. Friend's statement in the House on 22nd March and the replies already given today.

Mr. Fletcher: Is the Minister aware that there is a great deal of anxiety in this country regarding not only trade and investment but the safety of British residents in Southern Africa? It is necessary that the Minister should make a statement to try to allay those anxieties. Does he agree that it is now time for a new British initiative which might bring together the various Heads of State in Southern Africa? Will he particularly bear in mind Sir Winston Churchill's phrase that jaw jaw is better than war war?

Mr. Ennals: This is advice which I am sure the hon. Gentleman and the whole House would wish to give to Mr. Smith, because there is growing concern in this country and in others parts of the world about the consequences of increasing violence in Rhodesia. There is concern if it means the loss of European or African lives, and it is likely to mean both.
The hon. Gentleman suggested that the British Government should now take a new initiative. He will know that last week my right hon. Friend set out the basis of an initiative. The key to open that door is for Mr. Smith, or others who represent those in power in Rhodesia, to say "Yes, we are prepared to discuss a rapid transfer to majority rule". Once that has been said, there is the basis for a British initiative. But to step in with new initiative when those in power in Rhodesia have refused to accept the principle would make no contribution at all.

Mr. Jessel: In the event of majority rule in Rhodesia, what guarantee can the Minister give for the protection of minority rights, whether those minorities be black, white or coloured?

Mr. Ennals: These are matters for what we hope will be a new constitution.
In the proposals which Mr. Nkomo presented on behalf of his section of the ANC, there were some very detailed matters—I will not go into them at the moment, but I shall be happy to do so in correspondence—in which he showed his concern about there being guarantees for the rights of the minority. But none of those proposals will come into effect until Mr. Smith accepts the basic principle.

Mr. Robert Hughes: This Question refers to Southern Africa. Is my right hon. Friend aware that, as in Rhodesia, there are great problems, for instance, regarding the constitutional position of Namibia? Is he aware that many of us for more than a decade have urged the leaders of African national opinion to be patient and to negotiate? It now looks as though that patience is completely exhausted and that, as long as South Africa intends to maintain its grip on Namibia by force, there is no alternative left to the guerrilla movement of SWAPO.

Mr. Ennals: I think that my hon. Friend knows that a greal deal of pressure is being exerted on the South African Government to recognise that time is not on their side in Namibia, as time has not been on the side of the European minority in Rhodesia. The Security Council passed a unanimous resolution, in which we played a part. The countries of the Nine have made their views known directly to the South African Government. The United States, France, and Britain have on two occasions made direct representations. Recently in this House -we have said that the South Africans ought to set themselves a target—perhaps one year—for the independence of that country. I believe that that would relieve much of the pressure which, if not relieved, will also lead to bloodshed.

Mr. Hastings: If the Government feel unable to do anything further in the present circumstances, which seems possible, if the incursions across the Rhodesian border continue to mount, which also seems possible, and if this happens with the support, directly or indirectly, of the Soviet Union, which to my mind is certain, would the Minister care to make an assessment of the not unimportant implications for the British interests and the interests of the free world.

Mr. Ennals: British interests, as defined in a variety of ways, are suffering and will inevitably suffer until there is a proper constitutional settlement in Rhodesia. As regards some of the "ifs" of the hon. Gentleman, it may very well be that unless some sense and some diplomacy are shown soon by leaders in Rhodesia, there will be an increase of the pressures and the incursions over the frontier. I think that they will be Zimbabweans who will be involved in a freedom struggle.
I have had the opportunity of discussing external intervention with the Foreign Minister of Mozambique. Mozambique has made it clear that it is not its wish to see freedom or independence brought to Rhodesia as a result of external intervention. The Mozambique Government have no wish to see foreign forces on their territory, unless they were in some way attacked. So the question has to be put to Mr. Smith: what does he think are the consequences for his country if there is no move to bring about constitutional talks?

Africa (Cuban Troops)

Mr. Townsend: asked the Secretary of State for Foreign and Commonwealth Affairs if he will give an estimate of the number and location of Cuban regular soldiers on the African continent, apart from those in Angola.

Mr. Ennals: Cuban regular soldiers are employed mainly in advisory and training rôles in Guinea, Equatorial Guinea and Somalia. It is also possible that there are small detachments similarly employed in Guinea-Bissau, Mozambique and the Western Sahara. We estimate they amount to about 500 men in all.

Mr. Townsend: I thank the Minister for that reply. However, what further action will the Government take to obtain the withdrawal of all foreign troops from Southern Africa? Secondly, what consideration have the Government given to the possibility of international economic action against Cuba?

Mr. Ennals: There is a debate now proceeding in the United Nations, and I assure the hon. Gentleman that Her Majesty's Government's representative will state quite clearly that it is our view


that all foreign forces ought to be withdrawn. Secondly, fears of further intervention elsewhere in Africa by Communist forces were stressed by my right hon. Friend in his meetings with Mr. Gromyko a few days ago. As for any further Cuban intervention in Africa, the Cubans are in Angola by the invitation of that Government and there is at present no sign of such intent to intervene elsewhere, but we have made it clear that if there were it would create a serious situation.

Mr. Lawrence: Is the right hon. Gentleman aware of the strength of feeling in my constituency about the fact that we should be giving money or aid to Mozambique which might be used by a country which gives succour to Cuban or other guerrillas? Will the Minister say how much has been given in recent months to Mozambique, how much it is proposed to give, and what restrictions, if any, the British Government are proposing to place upon grants of aid to Mozambique?

Mr. Ennals: First, there are no Cuban guerrillas in Mozambique. British assistance to Mozambique is given as part of the guarantee that we made to the United Nations, which was agreed unanimously by the Commonwealth Prime Ministers' Conference, when Mozambique fell into line—which we welcomed—with almost all other countries in imposing sanctions against the illegal régime.
We have indicated that over a period of years we are prepared to contribute from our aid funds up to a total of £15 million. Initially, an offer of £5 million has been made available, and a British aid team will, we hope, soon be in Maputo in order to discuss the details of the offer, and I assure the hon. Gentleman and the House that it will be entirely for peaceful purposes. We are quite satisfied that we shall be able to supervise our aid programme.

Mr. Maudling: What guarantee can the Minister give to the House that this British money will not be used, directly or indirectly, to sustain and encourage the guerrillas?

Mr. Ennals: My right hon. Friend the Minister for Overseas Development and my right hon. Friend the Foreign Secretary are satisfied that our methods of

administering aid funds are such that we can be satisfied that they are and will be used for the purposes for which they are given. This is a principle to which we adhere very strongly, and this is an assurance that I have received from the Foreign Minister of Mozambique, and I have no reason to doubt it.

Mr. Robert Hughes: Does my right hon. Friend recall the grossly exaggerated stories of a month ago and six weeks ago saying that the Cuban forces were in Angola for the precise purpose of rolling into South-West Africa and carrying on a war against South Africa itself? Have not events shown that the Angolans have made it perfectly clear and were correct in saying that the presence of Cuban troops was because Angola was invaded in the first instance by South Africa?

Mr. Ennals: I do not want to get involved in arguments about which external intervention came first, whether it was from Cuba or South Africa. My right hon. Friend and I have condemned external intervention from both sides, including the very large presence of Cuban troops on Angolan terrirtory, so I cannot support my hon. Friend to that extent.
If it is true that there will be no further extension, it may be that the representations that have been made by the United States, ourselves and many other countries, incuding African countries, about the dangers of foreign forces on African territory have had their effect. That certainly is our hope, and we shall continue with those pressures.

Mr. Evelyn King: If Her Majesty's Government are saying "No independence before majority rule", as I understand they are saying, would it not be a logical corollary, upon the assumption that no African nationals can wish to exchange what they regard as one form of imperialism for another that is even worse, for Her Majesty's Government to say to all surrounding African countries "No independence before Cuban withdrawal"?

Mr. Ennals: That is not something that we can lay down. We can argue, we can make representations and we can urge, but basically at this stage it is for the Angolan Government to decide


whether there should be foreign troops on their territory, as it is the right of other countries to decide. However, our views will continue to be clearly known. I assure the hon. Gentleman that in the discussions that I shall be having in the next few days, the views of Her Majesty's Government will be very clearly presented.

Oral Answers to Questions — EUROPEAN COMMUNITY

European Assembly (Direct Elections)

Mr. Body: asked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement about the progress being made for direct elections to the European Assembly.

Mr. David Mitchell: asked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on the attitude to be taken by Great Britain at the forthcoming EEC meeting on the subject of direct elections.

Mr. Skeet: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on direct elections to the European Parliament.

Mr. Jay: asked the Secretary of State for Foreign and Commonwealth Affairs what further examination of the constitutional consequences of direct elections to the EEC Assembly the Government propose to undertake before committing the United Kingdom to this innovation.

The Minister of State for Foreign and Commonwealth Affairs (Mr. Roy Hattersley): I have nothing to add to the speeches made by Ministers during the two-day debate on this subject which ended yesterday.

Mr. Body: As the right hon. Gentleman has insisted that he feels under a Treaty obligation to make progress towards direct elections, should he not warn his right hon. Friends, particularly this week, that he feels under a similar Treaty obligation to make progress towards a common competitive policy founded on the principles of a market economy?

Mr. Hattersley: My right hon. Friend the Foreign Secretary dealt with the subject of a common competitive policy in a statement two days ago. I have nothing to add to what he then said.

Mr. Jay: As the Government have wisely decided that a Select Committee should be set up to consider these matters, does my right hon. Friend agree that the setting up of that Committee and its terms of reference are matters to be decided by this House and not by the Government?

Mr. Hattersley: The fact is that the terms of reference must be submitted to this House, but I am sure that my right hon. Friend will agree that the Government should give some guidance on those terms.

Mr. Skeet: Does the right hon. Gentleman concede that the whole course of British history lies in giving powers first to Parliament and to come to universal suffrage later, as instanced in 1832, 1864 and 1884? What is the point in giving universal suffrage to Europe without political powers being available for that purpose?

Mr. Hattersley: I am not sure whether the hon. Gentleman was in the House yesterday afternoon. If he was, he will recall that I explained that the powers granted to Europe could not be more precise, in that they are stipulated in the Treaty of Rome.

Council of Ministers

Mr. Crawford: asked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to meet his EEC colleagues.

Mr. Gwilym Roberts: asked the Secretary of State for Foreign and Commonwealth Affairs when he next intends to meet his EEC colleagues.

Mr. Hoyle: asked the Secretary of State for Foreign and Commonwealth Affairs when he next plans to meet other EEC Ministers.

Mr. James Callaghan: At the meeting of the European Council tomorrow.

Mr. Crawford: Will the right hon. Gentleman tell his EEC colleagues that


after Scottish self-government they will be able to welcome one strong currency from the British Isles—namely, the Scottish pound, which will be the backbone of EEC currencies and at the same time will assist Scottish farmers in respect of the green pound?

Mr. Callaghan: I note the call for independence constantly repeated by the SNP. I have no doubt that it will be rejected by the people of Scotland in due course.

Mr. Dalyell: If the Foreign Secretary speaks to Helmut Schmidt, will he remind him of the interests of 17 million people of Bavaria, which was a kingdom 120 years after Scotland, or of 12 million people of Piedmont, also a kingdom long after Scotland became one?

Mr. Callaghan: Yes, Sir, I shall be happy to have a word with him on all these matters. But it does not disguise the basic truth—a truth which I hope even members of the SNP may see—that the influence of the United Kingdom in the Community and our economic strength are greater in an integrated United Kingdom than in separate communities. I hope that the SNP will not go on misleading its supporters on this matter.

Mr. Marten: As our partners in the Common Market have come out firmly in favour of majority rule in Southern Africa and Rhodesia—which I am sure will please my hon. Friends below the Gangway—will they be helping us as partners with aid to Mozambique and also with any aid that might be given, as mentioned by the Minister of State, to people in Rhodesia?

Mr. Callaghan: I think that that is a valuable suggestion which follows up something I raised when I made the original statement. We are now contributing aid to Mozambique through the Commonwealth as well as through the United Nations, and it would be appropriate if the Community were to do the same. I would not hesitate to accept such support, and I hope that the hon. Gentleman would also accept it.

Mr. Roberts: Will my right hon. Friend reconsider the Pyrrhic victory achieved by the Minister of Agriculture at the recent EEC meeting on

prices? In whatever capacity he makes the decision, will he ensure that in future the Secretary of State for Prices and Consumer Protection, or her representative, is also present?

Mr. Callaghan: The Question asks when I shall meet my colleagues, not when the Minister of Agriculture will do so. Questions on that matter have already been asked. None of us feels that CAP is a totally perfect instrument. I have no doubt in the light of what is happening in the snake at present and before next year's price review that there will have to be some serious discussion among member States.

Mr. Hoyle: Will my right hon, Friend, in his amiable way, tell his EEC colleagues that the people of this country feel disillusioned about the Common Market and are still awaiting the benefits promised them during the referendum campaign?

Mr. Callaghan: I am not always amiable, but it depends—[HON. MEMBERS: "On if you win."] I have a feeling that I cannot change a single vote whatever I say; but I keep trying.
The benefits that the United Kingdom gets from the EEC in financial terms are much greater than were foreseen at the time we entered, because of the change in monetary rates and agricultural policy, but that is adventitious and will not persist for ever. But as regard political policy and co-ordination of foreign policy, I have no doubt that our voice is stronger when we speak with the assent of other Community members—as, for example, on such questions as Southern Africa—than when we speak on our own.

Tindemans Report

Mr. Gould: asked the Secretary of State for Foreign and Commonwealth Affairs whether he has yet reached any conclusions on the Tindemans Report.

Mr. James Callaghan: The Report will be discussed at the forthcoming European Council. The Government regard it as a constructive basis for discussion of the development of the Community, even though we can by no means accept everything in it. We shall be happy to join in whatever further work on it the European Council sets in train before reaching any definitive conclusions.

Mr. Gould: Is my right hon. Friend aware that in respect of the Tindemans Report many hon. Members on both sides of the House were much encouraged by the statement in his Hamburg speech to the effect that he is not a federalist? Will he give an assurance that so long as he remains in charge of the Foreign Office, in one capacity or another, that statement will remain the keynote of the British Government's policy?

Mr. Callaghan: Yes, federalism is failing in Europe and has never been a strongly held view in this country. However, that should not prevent us from trying to get the maximum co-operation among our partners in the Community. We are stronger when we work, speak and act together. Providing we do so with due regard to our individual nationhood—not narrow nationalism—it will be for the benefit of this country as well as Europe.

Mr. Amery: The Tindemans Report places emphasis on an effective European foreign policy. Does the Foreign Secretary agree that the situation now prevailing in the Lebanon is of very serious import for Europe, whether it results in partition or an extremist takeover? Will he ensure that this subject is discussed at tomorrow's meeting?

Mr. Callaghan: The situation in the Lebanon is now the most serious in the Middle East and could give rise to a flare-up in other ways. We are constantly in touch with our allies in the Community as well as in the United States and I should like to put on record my appreciation of the restraint the Israelis have shown in the present situation and of the skill shown by the Syrians in trying to mediate. I hope that the matter will come to the attention of the European Council, though the agenda is a matter for agreement among us all.

Mr. Raphael Tuck: If, as the Tindemans Report insists, we have direct elections to the European Parliament, can my right hon. Friend give us some idea of the kind of issues on which such elections would be fought, supposing, for example, that the hon. Member for Banbury (Mr. Marten) and I were opposing candidates for the same seat?

Mr. Callaghan: It would be a very interesting election, but I am not sure

how much enlightenment the electors would get.

Mr. Scott-Hopkins: Can the right hon. Gentleman confirm that he rejects the idea of a two-tier Community with first and second-class membership, as proposed in the Tindemans Report? Does he agree that it is essential to make progress in monetary and economic matters in order to move towards a unified reserve currency?

Mr. Callaghan: A two-tier Community has no prospect of holding the Community together and must be rejected. On economic and monetary union, I repeat my personal conviction that attempts to revive the snake, even if it sloughs half-a-dozen skins, will fail until there is some economic convergence. It is putting the cart before the horse to try to erect a monetary system until our economies are moving more closely together.

Mrs. Dunwoody: Does not my right hon. Friend agree that the best hope for Europe lies in an orderly advance by nation States with their assent? Does he agree that the suggestion in the Tindemans Report that majority decisions should be taken and that all countries should come into line, irrespective of their views, would be a retrograde rather than an advancing step?

Mr. Callaghan: I agree with the first part of my hon. Friend's question. I suppose that there are minor matters on which a country would not feel it necessary to hold out if it was in a minority, but I have never seen any major issue of importance to one nation being discussed in the Council of Ministers where that country has been willing to yield if it felt it was going to be put at a major disadvantage. It would break the Community if there were an attempt to enforce a policy different from that.

Mr. Hurd: Is it not strange and wrong that, despite repeated requests, the House has not yet debated this important Report before our Prime Ministers, old and new, go to Luxembourg to discuss it tomorrow? The right hon. Gentleman has given us hints that there are parts of the Report which he does not think should be followed, but are there any ideas in the Report which he thinks should be pursued in the interests of this country and the Community?

Mr. Callaghan: I do not know why the hon. Gentleman raises this topic. There was a Supply Day yesterday and it is for the Opposition to choose what we discuss on those days. If they wish to debate direct elections rather than the Tindemans Report, they cannot complain the next day. The question of a debate on the Report is a matter for my right hon. Friend the Leader of the House, but debates can be arranged and there are several Supply Days coming up if the Opposition wish to use them. However, it is a long-range Report and there will be no decisions taken on it tomorrow or the next day.

Council of Ministers

Mr. Skinner: asked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to meet the EEC leaders; and if he will make a statement.

Mr. Banks: asked the Secretary of State for Foreign and Commonwealth Affairs when he next intends to meet his EEC colleagues.

Mr. James Callaghan: I would refer my hon. Friend to the answer I gave earlier to the hon. Member for Perth and East Perthshire (Mr. Crawford).

Mr. Skinner: I cannot understand why this Question was not linked with the others my right hon. Friend has just answered. When he next meets the EEC leaders, will my right hon. Friend, in his capacity as Foreign Secretary or any other capacity, convey to them that British miners, among many other workers, are getting more than a little dissatisfied at having to pay higher prices and taxes in order to assist the removal of mountains of surpluses of various foodstuffs, especially as there are 30 million tons of British coal which the Common Market countries are refusing to get rid of?

Mr. Callaghan: The reason the Questions were not linked was that I understood that there was a request some time ago that not too many Questions should be linked. I am perfectly willing to go back to the old system, which is more convenient to Ministers and less convenient to hon. Members. I will not convey the point of view expressed by my hon. Friend to the European Council

leaders because I do not think that it accurately reflects the situation.

Mr. Banks: When he meets his colleagues tomorrow, will the Foreign Secretary discuss with them the need for a relationship to co-ordinate policies and actions on international affairs such as those adopted towards Angola and neighbouring countries?

Mr. Callaghan: This is a matter for continuing discussion. We did not wholly succeed on Angola, but that was not the fault of this Government. I am very much in favour of closer co-ordination, although naturally some countries, and on occasions we would be among them, would not wish to stifle individual initiative.

Mr. Spearing: Since my right hon. Friend has dismissed any support for federalism from the Government in particular and the country in general, will he tell the EEC leaders tomorrow that the Government are not in favour of the suggestion in the Tindemans Report that powers of legislation should be given to a directly elected European Assembly? Will he not agree that the combination of these two matters is a distinct step towards the federalism which he has disavowed?

Mr. Callaghan: This is a little like recooking yesterday's cabbage. The Government's position on giving legislative powers to the European Assembly was made quite clear in my speech and other speeches from this Box earlier this week. The powers of the European Assembly will be the powers it now has under the Treaty.

Mr. Gorst: When the Foreign Secretary meets his opposite numbers, will he try to persuade them to get together to reverse the vile and abhorrent resolution of the United Nations on anti-Zionism? Is there not something which could be done by European leaders to alter that resolution?

Mr. Callaghan: I am not sure to which resolution the hon. Member is referring, though there have been some against which we have found it necessary to vote because of their anti-Zionism. However, I do not think that this would be a profitable subject for discussion at Luxembourg. There is constant contact


among the ambassadors of the Nine at the United Nations when these matters are coming before the Security Council.

Mr. William Hamilton: Does my right hon. Friend recall that one of the recommendations, if it can be called that, in the Tindemans Report is that prominent European leaders should address the European Assembly and that their addresses should be followed by debates on matters of European concern? When he becomes Prime Minister next week, will my right hon. Friend be averse to that kind of visit or in favour of it?

Mr. Callaghan: My hon. Friend asked me a question about this in my capacity as Foreign Secretary a week or two ago. My attitude is the same today. I would be ready to address the European Assembly if it thought that that would be profitable and useful. That will continue to be my attitude as long as I remain Foreign Secretary.

Mr. Dykes: As the Foreign Secretary and the acting Prime Minister will be anxious to repeat to the other leaders in the EEC their assurance yesterday that they will not fall out of line with other member States on the timetable for direct elections, does that not inevitably mean that our domestic preparations must be terminated by August at the latest?

Mr. Callaghan: I shall be able to give a better answer to that next week after I have seen how the other countries regard the proposal. The line we should adopt, and which I would propose to adopt in view of yesterday's debate, is to be ready to move as fast as the other countries move. That is a balanced statement, because I am not yet sure how far all the other countries are ready to move, but we must certainly keep up with them.

Mr. Atkinson: Does my right hon. Friend accept that this is not a question of recooking yesterday's cabbage, but he is cooking up a complicated thesis which I should like him to try to unravel? I understand him to have said that he is agreeable to direct elections to the European Parliament with Treaty powers, that he is against federalism and that he thinks that Europe must move much more quickly towards economic unity. Are not those three together a basis for the federalism to which my right hon. Friend is opposed?

Mr. Callaghan: I do not think that I phrased that last point in the way my hon. Friend put it. If there is to be economic integration—and how better could the Community start than by tackling the problem of structural unemployment, which is likely to dog Western Europe and wider areas for the next four or five years?—my position is that there will have to be common action on these matters which will need to precede monetary union. That is not quite the way my hon. Friend put it.

Mr. David Steel: In view of the Foreign Secretary's experience as a candidate in an election, may we take it that when he next meets EEC leaders he will not be proclaiming the virtues of the first past the post system? In view of the Minister of State's discourtesy to us last night, will the right hon. Gentleman give an undertaking that the Select Committee will have sufficiently wide terms of reference to discuss direct elections?

Mr. Callaghan: My right hon. Friend last night was asked to give way at two minutes to 10 o'clock when he was in the middle of his peroration by an hon. Member who had not been present during the debate. I see nothing discourteous in that, except on the part of the hon. Gentleman who was trying to interrupt him. The question of voting systems will be a matter for the Select Committee to consider if it so wishes, although I do not depart from my own view that our existing system will best serve the people of this country.

ST. AUGUSTINE'S HOSPITAL CANTERBURY

Mr. Patrick Jenkin (by Private Notice): Mr. Patrick Jenkin (by Private Notice) asked the Secretary of State for Social Services if she will make a statement on the Report on St. Augustine's Hospital, Kent.

The Minister of State, Department of Health and Social Security (Dr. David Owen): This inquiry was commissioned by the South-East Thames Regional Health Authority and the Report of the Committee is to the RHA. The chairman of the Authority has issued a full statement today, and the RHA as a whole is to consider the findings and recommendations of the Committee at its


next meeting on 15th April. I feel, therefore, that I should limit my comments at this stage to those matters which are the immediate and direct responsibility of my Department. I have placed copies of the Report in the Library. My right hon. Friend the Secretary of State is to visit the hospital shortly.
There are three main matters which the Report suggests that the RHA should consider drawing to the attention of the Secretary of State. The first is the need to develop and extend the work of the Hospital Advisory Service. The Government totally accept this. The Report states in paragraph 4.45 that if the Hospital Advisory Service recommendations
had been fully discussed and implemented there would have been no critique.
In paragraph 4.50 the Report calls attention to the difficulty of having an advisory team—in this case the Region—
too close to those whom it is advising.
The Report also asks for the HAS to make regular visits every three years to hospitals for the mentally ill. The HAS has always made follow-up visits to hospitals where it thought it appropriate and has been ready to answer requests for visits where it can.
The Government announced on 31st July 1974 that we intended consulting on a wider remit for the HAS and changes in its functions. These consultations have now been completed. A circular will be issued very soon. The Hospital Advisory Service will be called a Health Advisory Service; it will continue to concentrate on long-stay services but will have social work service participation and cover community services as well as hospital services. The HAS in future will have direct and closer contact with field authorities, particularly in regard to follow-up. It will in future follow up its reports with health authorities in all cases, resolving problems and differences as far as possible at a local level, but where matters give rise for concern the service will be expected to exercise its right of access to Ministers.
The second point relates to the exchange of patients between special and National Health Service hospitals. It is not the Department's policy that the admission

of patients from NHS hospitals to the special hospitals should be conditional on the NHS hospitals in question accepting in return a special hospital patient. However, if there is a special hospital patient already on the waiting list for transfer to the hospital concerned, it is usual to ask whether the hospital is prepared to accept the patient in question. Yet the House must face the fact that there is a great shortage of specialised secure accommodation.
The Government are making earmarked money available to regions for the early development of regional security units. A special capital allocation of £2·5 million annually is being provided. Special assistance amounting to over £4 million revenue is also being made available to RHAs annually from 1976–77 to help them develop their regional security units and interim facilities until the units themselves are ready.
The third matter related to the question how far the suggestions in the Report for better management in relation to St. Augustine's Hospital should be applied to other psychiatric hospitals. There is little doubt that there will be aspects of wider application, and we shall consider what action will be necessary in the first instance with the South-East Thames Regional Health Authority, and then with all health authorities.
What this Report emphasises yet again is the necessity for a higher priority to be given than in the past to mental illness services. It is a salutary lesson that, for all the talk in this House, and outside about the priority for the mentally ill, the proportion of total health and personal social services devoted to mental illness actually dropped from 8·2 per cent. in 1970–71 to 7·8 per cent. in 1975–76, although there was nevertheless an increase in real terms in resources devoted to the mentally ill throughout that period.
The Consultative Document on Priorities for Health and Personal Social Services which we issued last week proposes that services for the mentally ill should be a major priority area for the years until 1979–80, and we have recommended that expenditure on mental illness services should increase so that its proportion of total health and personal social services expenditure should rise to 8·2 per cent. by 1979–80.

Mr. Jenkin: I thank the Minister of State for that long reply. Although the whole House will wish to acknowledge that much fine work is done in our mental hospitals, including St. Augustine's, is not the Report yet another example of gross shortcomings brought to light only by dogged perseverance on the part of one or two individuals?
Is the Minister of State aware that the Government have had the Davies Report on Hospital Complaints Procedures since December 1973, and that my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) set up that Committee expressly as a result of the Ely, Farleigh and Whittingham disclosures? Did it not take the Government until February 1976 even to accept in principle the main recommendation that there should be a code of practice for handling complaints? When will the Government implement in practice the main proposals of the Davies Report?
My second question relates to the care of the long-stay mentally ill. Does the Minister of State recollect that the Committee of Inquiry into the South Ocken-den Hospital urged that the Department should issue guidance to regional authorities on the care of the long-stay mentally ill and that even now, three years later, no such guidance has been issued? As neither of those matters involves public expenditure, may we ask the Government to deal with both with a greater sense of urgency?
When the Minister of State points to the record of my right hon. Friend the Member for Leeds, North-East, may I in turn point to him and say that the rise in real terms in expenditure on the care of the mentally ill was at exactly twice the rate during the period of office of the Conservative Government that is proposed in his right hon. Friend's booklet on priorities for the next five years?

Dr. Owen: I am grateful to the right hon. Gentleman for Wanstead and Woodford (Mr. Jenkin). In reply to his last comment, I was not making a political point. There is a great deal of commitment on both sides of the House to the cause of the mentally ill and the mentally handicapped. What we all know is that we have to choose, and I think the figures I have shown indicate that, despite having made the decision to give it priority

—I gladly pay tribute to the rising percentage of expenditure on the mentally handicapped in the period in question—it was not possible to increase the percentage in relation to the mentally ill.
Concerning the right hon. Gentleman's first point about the Davies Report, the problem for us arising from that Report is that the professions—and in particular the medical profession—have been very concerned about many of its recommendations and asked for a longer period for consultation than is normal. The Government felt, in view of the very strong feelings which the medical profession held about the Report, that they should extend the period for consultation. That was the prime cause of the delay.
We have accepted one of the Report's major recommendations. Relating to the whole question of setting up the special review boards; we have asked the Select Committee of the House of Commons which deals with the Health Commissioner to look at the whole question of the remit of the Health Commissioner, in order to try to avoid an overlap of investigative bodies in this area.
As to the South Ockenden Report, which related to hospitals for the mentally handicapped, there is a need for the code, and I agree with the right hon. Gentleman that that would not require resources. It has again taken time to get agreement within the nursing profession, the medical profession and others on what can be done in this area. But I recognise that there is an urgency.

Mr. Crouch: I declare an interest, in that St. Augustine's Hospital is in my constituency. I know it very well and have visited it many times. As a member of the South-East Thames Regional Hospital Authority I have an added interest in the Report.
I declare to the House, too, my very great concern at what the inquiry has revealed as to the conditions at St. Augustine's Hospital and the care of patients. But I should like to draw to the attention of the Minister of State that in the foreword to the Report—and the Report is about a small part of the hospital and not the whole of it—the Committee of Inquiry states that, with very few exceptions, all those whose performance has been criticised were doing their best.
I point out to the Minister and to the House that it is not just a question of money, although more money has been put into St. Augustine's Hospital than into any other psychiatric hospital in the South-East Thames region. The problem is that it is an isolated hospital, as all old mental hospitals are. They were designed to be isolated at a time when the tendency was to put the mentally ill away from sight. If we were today to implement the good intentions of the Government—indeed, of all Governments, as pointed out by my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin)—towards achieving a better standard of care and conditions for the mentally ill, it would in this region alone cost not less than £200 million to implement a better system of attaching the psychiatric wards to the main stream of the Health Service, instead of isolating them.
Equal to my concern for patients is my concern for what the nurses and the other staff in a mental hospital have to put up with, particularly in long-stay wards, where they are dealing with violent patients and patients who are doubly incontinent.
We should keep in mind that the Report is a constructive one. I am helped by the Minister of State's response, which was very constructive, to the effect that we shall use the Report for the purpose for which it was intended, namely, to help us improve conditions. No one wishes to condone the mistakes. We wish to go on to improve conditions, not only in this hospital but elsewhere.

Dr. Owen: I agree with the hon. Gentleman that it is a constructive Report. I think that all of us in the House have to be careful, when such reports reveal grave shortcomings, that not all the criticism focuses on the staff. The staff work in very difficult circumstances, often in very old buildings, isolated—as the hon. Gentleman has said—and dealing with a very large number of patients. We have to recognise that some of these patients are also violent, and that there is a strong case for them to be treated in more secure accommodation, or in special hospitals.
I share with the hon. Gentleman the feeling that more money will be needed

but that money is not the only answer. When talking of better services for the mentally ill, we must try to recognise that many of these large psychiatric hospitals will be making a contribution to the National Health Service for 15 or 20 years. They must have resources, part of which must be capital, in order to improve the fabric in which patients live.

Mr. Pavitt: I welcome my right hon. Friend's statement about the extension of function of the Hospital Advisory Service, the importance of which cannot be over-emphasised.
In considering the consultative document—my hon. Friend has already said that there will be massive increases in this area in the next four years—in terms of priorities, will the emphasis still be on the staff rather than buildings, in spite of the fact that more buildings are needed? Will my right hon. Friend confirm that the spotlight is always placed on the things that go wrong and that there are many thousands of devoted charge nurses and doctors who spend their lives in the service and to whom no praise whatsoever is given?

Dr. Owen: I agree with my hon. Friend as to the tremendous devotion shown by the staff in hospitals dealing with the mentally ill and the mentally handicapped, and in particular with the long-stay patients. However, I must add a word of caution. The consultative document, to which my hon. Friend referred, indicates only what could be and should possibly be spent on the mentally ill. It will be spent, as past history shows, only if there is a great deal of commitment throughout the Health Service and throughtout the country to giving this area a higher priority than it has been given hitherto.

Sir George Young: The Minister explained that the problems arose from the failure to implement the Report of the Hospital Advisory Service. How many Reports prepared by the Service concerning other psychiatric hospitals have not as yet been implemented?

Dr. Owen: I do not want to prejudge the question. There have been some failures of implementation. The criticisms about the follow-up of Hospital Advisory Service Reports have some substance. It is in order to try to get a


better follow-up process—which involves the Hospital Advisory Service initially and then, if necessary, reporting back to Ministers—that we have made changes.

Mr. Moonman: The Report gives a most terrifying account of mental hospital life today. My hon. Friend will appreciate that although one does not wish to make a general criticism of nursing staff, it would be equally wrong to ignore the responsibility in this case for the brutal treatment of patients. Will my hon. Friend not take into account the way in which the recruitment, selection and training of nursing staff are carried out in the future, as that is crucial?

Dr. Owen: I share, as I am sure the whole House does, my hon. Friend's concern. There are matters in the Report to which the House will no doubt wish to return, as they give cause for great concern. Staff training has improved substantially in the past decade or more, but I agree that there is scope for greater improvement and that that is the way forward.

Sir D. Walker-Smith: I give a general welcome to the Minister's intention to seek to expand the resources allocated to mental health, and in particular I hope that he succeeds in getting greater real expenditure on it, but is there not a particular problem with the long-stay wards in the old hospitals? Will the Minister give all possible priority to that from the point of view, among others, that better accommodation and facilities are necessary for the encouragement of the recruitment of well-trained and enthusiastic staff?

Dr. Owen: I agree with the right hon. and learned Gentleman. We owe it to the staff to provide better facilities if we are to keep their high sense of commitment. Long-stay wards face considerable problems because of overcrowding. We need to be able to get patients out of hospital and back into the community in order to free accommodation within hospitals. That is why we cannot look at the problems of the mentally ill in isolation. It is not just a problem for the National Health Service. It is also a problem for the local authorities, and particularly the personal social service departments.

Dr. M. S. Miller: Does not my hon. Friend accept that there are far too many cases of this kind for any degree of complacency by this House and that this seems to be a case of one flying over the cuckoo's nest? There is an element of going back to the Middle Ages in some of our mental hospitals, and a civilised and compassionate Government cannot accept that there should be any kind of thuggery involved in dealing with patients who are in no way capable of looking after themselves. Would not my hon. Friend consider setting up a special committee to investigate the possibility of seeing that doctors, nurses and other staff who deal with patients of this kind are people of the highest integrity with the special skills to enable them to deal with their patients?

Dr. Owen: My hon. Friend knows, probably better than most, the problems that we face in this area. We are reviewing the working of the Mental Health Act, and we shall be happy to take any evidence and facts into consideration in looking at what future legislative changes may be made. As for my hon. Friend's question about the commitment of staff, I frequently tour the country and see staff working in these very difficult circumstances, and I pay tribute to their dedication. But sometimes things go wrong, and we should not tolerate them when they go wrong, especially when they involve questions of violence. However, we have to understand sometimes the provocation under which the staff work.

Mr. Moate: Without wishing to cast any doubt on the conclusion of the Report, will the hon. Gentleman accept it from me, speaking, as I do, as the Member for a neighbouring constituency who has seen and corresponded with many people who have received treatment at St. Augustine's, that I have never heard suggestions or complaints of bad care or treatment? Although undoubtedly there are lessons to be learned from such Reports as this, will the hon. Gentleman emphasise equally one important point which is made in the Report, to maintain public confidence and staff morale in these institutions? I remind the hon. Gentleman of the statement to the effect that the Committee of Inquiry is confident that staff have the skills and ability to solve these problems and that any


patient can now enter St. Augustine's with confidence that he or she will be satisfactorily cared for and treated.

Dr. Owen: I gladly give a reassurance to the hon. Gentleman's constituents. Many changes have been made already over the past year or two. There is no doubt that criticism relates to some parts of the hospital. But much of this criticism could be made of any other hospital. It is not unique. I wish that it were so.

Several hon. Members: Several hon. Members rose—

Mr. Speaker: I must ask hon. Members—

Mr. Christopher Price: Mr. Christopher Price rose—

Mr. Speaker: Order. It is discourteous for an hon. Member to remain standing when the Speaker rises to his feet. I must ask hon. Members to make their questions as brief as possible. I know that this is a very important matter, but we have an enormous amount of business before us today.

Mr. Christopher Price: I apologise for any discourtesy to you, Mr. Speaker. May I ask my hon. Friend whether he is aware that it is not primarily resources which are needed at the moment so much as clear advice from his Department not only in response to the Davies Report but over the whole area of patients' rights and compulsory treatments? Is he aware that although great regard should be paid to the rights of the staff to proper consideration, doctors should not be allowed permanently to prevent my hon. Friend's Department giving this clear advice to psychiatric hospitals up and down the country?

Dr. Owen: This issue relates to clinical freedom and to matters of clinical judgment. It is right that a Select Committee should look at the remit of the Health Service Commissioner to see whether he can, with advantage to everyone, while safeguarding the professions which naturally wish to preserve their rights, look at questions of clinical judgment. This will be for a Select Committee to report upon, and I do not wish to prejudge its findings.

Mr. Rees-Davies: Further to what was said by my hon. Friend the Member for

Faversham (Mr. Moate), with which I agree entirely—we in Thanet have had very few complaints about St. Augustine's—I should like an assurance from the hon. Gentleman. Is he satisfied that, following the recommendation of the inquiry and of the Inskip Report, the position now is satisfactory in those areas with which they dealt and that the scarcity of money and other resources will not stand in the way of clearing up complaints made in this Report?

Dr. Owen: It must be said in fairness to the Regional Health Authority that it faces many conflicting pressures on resources. But I hope that in reviewing this Report it will be possible to find a high priority for the demands of hospitals such as this. However, the country must understand that, if we invest in this area, the money cannot be spent in other areas. There is a limit on the amount that we can spend overall on the National Health Service. We have to ask ourselves what is the priority. I think that the judgment of this House is that the mentally ill should have been given in the past and should be given in the future higher priority than hitherto.

Mr. Costain: Like my hon. Friend the Member for Faversham (Mr. Moate), I have a neighbouring constituency, and I have had no complaints for a number of years about this hospital. However, there is general dissatisfaction in this area about the whole set-up of the hospital service. Will the hon. Gentleman take an early opportunity to visit my area in order to investigate the position for himself?

Dr. Owen: As I said in my statement, my right hon. Friend the Secretary of State will be seeing this hospital, and I have no doubt that she will talk to people in the area about their concerns and reassure those who use this hospital.

Mr. Peter Rees: Although I welcome the hon. Gentleman's statement and his promise of special assistance, will he recognise that there is a shortage of and therefore a need for day care units for the mentally ill in East Kent and that special assistance should be directed to this area, which might ease the transition back to normal life for the mentally ill, which we know to be one of the hon. Gentleman's objectives?

Dr. Owen: I agree with the hon. and learned Gentleman that it is vital to provide better community services. I hope that the measures which we are taking for joint financing between the health and personal social services through the mechanism of the joint consultative committees will ensure that we get, even at a time of considerable constraints on public expenditure, some improvement in facilities such as day care.

Dr. Reginald Bennett: Can the hon. Gentleman say whether the medical and supervisory staff were up to establishment at the time of these events?

Dr. Owen: I cannot answer that question without notice. However, as the hon. Gentleman is only too well aware, it is unusual for almost any hospital to be totally up to establishment. The question is how much they are below establishment.

Mr. Patrick Mayhew: Does not the Report say in paragraph 1.20 that in the long-stay wards there was either a complete absence of policy or the formulation of policy was carried out by nursing staff without encouragement or guidance? Did not the South Ockenden Report three years ago call for central guidance into the operation of multi-disciplinary teams in the hospitals for mentally handicapped patients, and is not the failure on the part of the Government to do anything about this quite disgraceful?

Dr. Owen: I think that we would all be well advised not to make this a political issue. Mental handicap, such as at South Ockenden, raises very different issues from mental illness. What is at issue is the question of clinical freedom and the extent to which central Government can direct doctors. The Government have published "Better Services for the Mentally Ill", built in part on the work which was done in the Department by the previous Secretary of State, and he published "Better Services for the Mentally Handicapped", built on work done by Dick Crossman when he was Secretary of State. I think that we would all be well advised to ensure that these two areas are given higher priority

than hitherto, and perhaps the House should expect doctors themselves and other medical professions to look at their practices not in the terms used in paragraph 1.20 of the Report of laissez-faire.

Mr. Aitken: Is the Minister aware that one side effect of this disturbing Report could be that St. Augustine's Hospital will be under pressure to ease its overcrowding problems by increasing the number of mental patients discharged to neighbouring communities? In those circumstances, will he take special precautions to ensure that no one community is overloaded with an excessive number of these patients and will he recognise in particular that the community of Thanet already has special problems in this respect?

Dr. Owen: This is one of the difficulties of a very large hospital discharging patients to what may be a small catchment area. As I say, there is a necessity to look at community services in relation to hospital services, particularly in the case of long-stay patients, and I hope that this can be done. But I must say to both sides of the House, especially to the hon. Member for Thanet, East (Mr. Aitken), that this costs money. It is no good advocating reductions in public expenditure and then expecting people to provide additional services.

BILL PRESENTED

IRON AND STEEL (AMENDMENT)

Mr. Secretary Varley, supported by Mr. Secretary Foot, Mr. Secretary Shore, Mr. Secretary Ross, Mr. Secretary John Morris, Mr. Edmund Dell, and Mr. Gerald Kaufman, presented a Bill to make provision with respect to the limit on the sums borrowed by, or paid by the Secretary of State to, the British Steel Corporation and the publicly-owned companies, with respect to the powers of the Corporation to lend and borrow and the powers of those companies to borrow and with respect to the Corporation's accounts; and for connected purposes; and the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 107.]

QUESTIONS TO MINISTERS

Mr. Hastings: On a point of order, Mr. Speaker—

Mr. Speaker: The point of order will come, I hope, at the beginning of the debate.

Mr. Hastings: On a point of order, Mr. Speaker, arising out of Questions. May I draw attention to Question No. 4 to the Secretary of State for Foreign and Commonwealth Affairs? I greatly appreciated the presence of the Secretary of State on the Government Front Bench, but when we reached Question No. 4 the Minister of State asked your permission to take with it Questions Nos. 6 and 14. My own Question was framed in identical terms to Question No. 4 from my hon. Friend the Member for Louth (Mr. Brotherton). I make no immediate complaint, because I was fortunate enough to catch your eye and was able to ask a supplementary question on another Question.
Would you not agree, Mr. Speaker, that in principle it is wrong for a Minister or a Department to seek to take together Questions that are similar or identical or virtually so and then to leave out one or more which, it could be argued, are exactly the same?

Mr. Speaker: This is not a question for the Chair. It is a long-standing custom in the House for Questions to be grouped. I will look into the matter to see whether there is any way in which I can help, but I doubt it very much.

The Secretary of State for Foreign and Commonwealth Affairs (Mr. James Callaghan): Further to that point of order, Mr. Speaker. Speaking for the Foreign and Commonwealth Office, I would welcome advice from you on this matter. We understood from the Table Office—I hope I am allowed to say this—that it was the desire of the House and of Mr. Speaker that, when there were eight or nine Questions on the same subject, instead of grouping them together we should divide them. If there is to be a change in that practice I should like to be advised of it, because it would help us very much to know what practice commends itself to the House. At the moment I am in a bit of a fog.

Mr. Speaker: I hope to put the right hon. Gentleman out of his fog. I was not blaming the Secretary of State. May I say that it has been for the convenience of the House that the grouping should take place and that the Chair has welcomed a reasonable grouping rather than have eight or nine Questions being answered at the same time, which leads to greater difficulty in balancing them.

ELECTRICITY SUPPLY

4.2 p.m.

Mr. Eddie Loyden: I beg to move,
That leave be given to bring in a Bill to limit the powers of Electricity Boards to disconnect supply from certain categories of households; and for purposes connected therewith.
The House is fully aware of the problem that is raised in this proposed Bill, and I hope that during this debate we may be able to see the extent to which that problem has increased and the tremendous difficulties that are being experienced by large sections of our society in the supply of heating for their homes. The present powers for disconnection are based on Section 21 of the Act of 1882. The House will agree that many profound changes have taken place during the 94 years since that Act went on to the statute book.
At that time electricity was largely unknown in many homes throughout the country, and it was not until the post-war period that many working-class homes were supplied with electricity. Therefore-fore, in the context of my Bill we are looking today at a situation dramatically changed from that which existed when the earlier legislation was introduced. Even in the 1920s and 1930s, when most people were dependent on the open fire as a means of heating, working-class families by their ingenuity could always find ways and means of heating the home. Today, however, because most homes are dependent on gas, electricity, oil and solid fuel, that particular activity has greatly diminished and now we are speaking in particular of the effects of electricity disconnections. But while my Bill would deal specifically with electricity supply, it is obvious that the same problem arises with gas and I would hope that at some future date a similar Bill will be brought before the House to deal with that problem.
We are all aware that charges for electricity have dramatically increased during the last few years. Since January 1973 those charges have more than doubled, and over this period a massive increase has taken place in the number of disconnections. The House will be fully aware of the causes and effects of increased electricity charges, because the subject has been raised constantly in the

House. Numerous Questions have been asked, and it was, I believe, the general feeling of the House which brought the Secretary of State for Energy to the point of making a statement on electricity disconnections as they affected old-age pensioners.
While that statement was most welcome, I suggest to the House that it was quite inadequate to deal with the breadth and depth of the problem which exists today, because the figures disclose that up to 31st March this year there were over 138,000 disconnections of electricity supply. Although that increase was below the anticipated increase projected last year, I feel that we have only the mild winter to thank for the present situation. I feel sure everyone will agree that had we had a severe winter the number of disconnections would certainly have doubled. In saying that, we have to take into account the consequences in hardship, misery and even death that would follow in the wake of disconnections of that magnitude.
From time to time the House has brought forward legislation to protect the interests of the people, and much progressive legislation has been invoked which 100 years ago would have seemed inconceivable. Today we have protection for a person buying goods through hire purchase whereby in certain circumstances those goods cannot be recovered without recourse to the courts. Similarly, after many years of struggle we have established the right of a person in many circumstances not to be ejected from his property without an order of the court.
Yet today, in 1976, we still allow disconnection of the electricity supplies, which in some cases may be considered as a means of life, and not only for older people. A recent television programme illustrated the concern expressed by mothers with newly-born babies, not only by those in low-paid or low-income groups but by families who appeared to be in a reasonably comfortable position, showing the difficulties they were experiencing and the concern they were expressing over the possibility of grave illness resulting from their inability adequately to heat their rooms. Many of them pointed out that their rooms were below the temperature that had been advised by the hospital. It is time for us to


examine whether it is right, when electricity is fast becoming a luxury for many people, to allow disconnections to take place in the way they do.
I believe that society generally rejects the idea that householders should be disconnected in this way. Even the steps taken by local and central Government agencies appear to be inadequate to meet people's need. All hon. Members will have had experience of the cases I have in mind. I could quote numerous examples which have been sent to me by various organisations. I am aware that hon. Members understand the position. I do not need to impress upon them the importance of this problem. The cases coming to the fore at the moment show that the problem is not confined to the elderly and chronically sick. There is a whole group of people affected whom the Government must help. I do not only have in mind those on low, fixed incomes. The unemployed are suffering too. There are single-parent families and other groups of socially-pressed people who are finding it difficult, if not impossible, to meet their electricity bills.
I hope that the House will give me leave to introduce the Bill. It will not resolve all the problems I have cited. That is a matter for the Government. Until we have a properly integrated fuel policy directing the resources of the nation to areas where they are most needed, we shall never overcome all our problems. I seek leave to introduce the Bill so that we may give the agencies to which I have referred the chance to come into operation and take up cases before disconnection occurs. I want the heavy hand of the electricity boards to be stayed until such time as there is an examination of the cases. This will give many people an opportunity to avoid disconnection.
Question put and agreed to.
Bill ordered to be brought in by Mr. Eddie Loyden, Mr. Ron Thomas, Mr. George Rodgers, Mr. Eric S. Heffer, Mr. J. W. Rocker, Mr. Robert Parry, Mr. Stan Thorne, Mr. Mike Thomas, Mr. Mark Flannery, Mrs. Audrey Wise, Mr. John Ovenden and Mr. Bob Cryer.

ELECTRICITY SUPPLY

Mr. Eddie Loyden accordingly presented a Bill to limit the powers of Electricity Boards to disconnect supply from certain

categories of households; and for purposes connected therewith; and the same was read the First time; and ordered to be read a Second time upon Friday 18th June and to be printed. [Bill 108.]

DEFENCE

Mr. Speaker: I have to announce my selection of amendments to the main motion on the defence debate. I have selected the amendments standing in the names of right hon. and hon. Members of the Official Opposition.

Mr. Frank Allaun: On a point of order, Mr. Speaker. I think you will agree that I am not the most contumacious of your flock. I do not frequently raise points of order with you. I must do so on this occasion. Since you and I first met, exactly 30 years ago at an historic Labour Party conference, I have always admired your sense of fair play. Now you are the protector of we Back Benchers. As you know from the Order Paper, 83 hon. Members have put their name to an amendment to the Government motion. We are regretting the spending of £5·6 billion a year on arms. By tomorrow there will be more names attached to that amendment.
In this debate there are three points of view. There is the Opposition point of view, which says that we should be spending still more money on arms. There is the Government point of view which is supporting a somewhat smaller increase. There is a further point of view which thinks that we are spending too much on arms. As I understand it from your ruling, groups one and two will be allowed to vote for their points of view. However, group three, representing half the Back Benchers on the Labour side and three Welsh nationalists, will be denied that opportunity.
That does not seem fair to me. It sticks in my gullet to have to vote for a Government motion which positively welcomes this increase in spending. I think that you may well say that you are bound by precedent. That is not so. I believe you will say that there is precedent for what you are doing. I want to quote to you two important precedents for allowing more than one amendment to be selected. I refer to the debate on the Gracious Speech and the debate on devolution. On


both occasions Mr. Speaker selected two amendments. What we are discussing this afternoon is not chicken feed—£5·6 billion—and it is a two-day debate. Surely we are entitled to have two amendments selected.
Even if there were no precedent, I would say "Precedent be blowed. Let fairness come first." I have seen my right hon. Friend the Chief Whip about this and he has said that if you will agree to this request he is prepared to put our amendment "above the line" and thereby allow it to be voted on. I request, if you cannot come to a decision at this moment, that you consider this with your advisers this evening and let us know tomorrow.

Mr. Speaker: The hon. Gentleman has presented his point of order with great courtesy, as he always does. He was right to refer to our long friendship, but of course it does not influence decisions I make now—especially in view of the conference he mentioned. I am not concerned with the merits of the arguments involved. I have only to observe the rules of the House. If the majority wishes to change the rules to allow two or more amendments to be called, the House must take action. The time for the Select Committee to get to work on this question is long overdue. This question is not new. My predecessor in the Chair had exactly the same issue to face in the debate on unemployment and ruled quite firmly on the issue. I had it a few weeks ago over the discussion on the Government's White Paper. Exactly the same rules apply.
The hon. Gentleman asks me whether I will look at the matter again. I am always willing to look at things again. I must tell him that I do so in the knowledge that there is not one chance in a million that I shall be able to change my ruling.

Mr. Frank Allaun: Further to that point of order Mr. Speaker. I regret the odds against our case, but you have not answered my question. If there are two important precedents for two amendments being taken, why cannot two amendments be taken on this occasion?

Mr. Speaker: They are not identical precedents. That is the trouble. The Select Committee recommended that in the debate on the Address there should

be an experiment to allow more than one Division. My predecessor took the view in the debate on devolution, which lasted four days—roughly the same as the debate on the Address—that he could extend the rule. He declined to apply that precedent when it came to the debate on unemployment, which was a two-day affair, as is this debate. Nothing pleases me more than to see hon. Members happy, but on this occasion I fear that I am strictly bound by the rules of the House. It is a question for consideration by the Select Committee on Procedure.

4.21 p.m.

The Secretary of State for Defence (Mr. Roy Mason): I beg to move,
That this House, recognising the need to provide adequately for the nation's security, welcomes the Statement on the Defence Estimates 1976 (Command Paper No. 6432); and, being aware of the economic factors which have led to cuts in all sectors of public spending, notes with approval that the defence cuts envisaged will fall on support services rather than on front-line forces, thereby maintaining the British contribution to NATO, the security and territorial integrity of the United Kingdom and peace in Northern Ireland.
One of the purposes of my Defence White Paper this year has been to give the House and the general public more information than ever before about our defence policy and about the three Services. It reports on the implementation of the defence review; it gives details on the financial and support reductions flowing from the recent public expenditure survey; and it places the resulting contribution of Britain to the forces of the Atlantic Alliance in the context of East-West relations generally. I also give substantially more information on the threat, the military balance, and NATO's strategy and organisation.
In addition to publishing this White Paper I shall be continuing the policy that I introduced last year of seeking a wider audience for the basic facts in the White Paper, and in a form which will be more easily understood by a wider section of the community. For many years we have distributed a short eight-page pamphlet, primarily for schools and recruiting purposes. This year I propose to include more information in the pamphlet and to appeal to a wider audience. I hope that the pamphlet will be available in a few weeks' time, and I shall be sending copies to hon. Members.
I believe it important that more of our people should know more about defence, and should know that our money and their money is spent to good effect on the Armed Forces and their supporting Services.

Mr. Tam Dalyell: Will my right hon. Friend also make it clear that our people should know the consequences should there be a situation where we are asked to have a separate Scottish Army, a separate Scottish Navy and a separate Scottish Air Force? At the same time will he spell out the detailed information about the costs of such preposterous proposals?

Mr. Mason: I understand that my hon. Friend wishes to take part in the debate later. I agree that it will be a costly national operation for Scotland to carry such a proposal out on its own.

Mr. Dalyell: Exactly.

Mr. Mason: My White Paper reports fully on the implementation of the defence review. We are making good progress in our policy of withdrawing our forces to the maximum extent possible from cur non-NATO commitments. We have now completed our withdrawal from Gan, Mauritius and Singapore. The Simons-town Agreements have been ended, and our forces in Cyprus have also been substantially reduced.
These reductions in our commitments have enabled us to concentrate almost the whole of our defence effort on to the Atlantic Alliance, and, further, to concentrate upon those commitments within the Alliance which we can meet most cost-effectively.
Of course, NATO expressed regret last year at the fact that we had been forced, by our own particular economic circumstances, to make reductions. But at no time did NATO suggest that we were undermining the security of the Alliance, or that we had got our priorities wrong. The House will have noted that I have been able to announce four further compensatory measures, in addition to the five that I announced last year, to improve our contributions to the flanks of NATO—commandos for the northern flank and combat troops and aircraft to the southern flank. We hope that host nations will be willing and able to provide

facilities for these forces. To this end we are discussing with Norway the ways in which it might be able to provide facilities for our forces and with the Italians the details of the support they will give us at their airfields.
In the defence review we undertook a major and fundamental reassessment of our commitments and of the capabilities we needed to meet them. In the time available we could do no more than make a broad attribution of savings to the supporting services and the civilian establishments in this country. But I always visualised that when time permitted we would probe these areas more deeply. So when, for economic reasons, I had to make a further contribution from defence towards improving our economic prospects, it was to this area of support that I turned my attention, in order to find a limited financial saving without affecting our front-line capability.
The burden of the recent cuts has fallen on civilian numbers and establishments. The details are set out in my White Paper. As the House will have noted, nine depots and establishments in the United Kingdom will be closed. The level of activity at a number of others is being reviewed. A wide variety of other economies in the support area is also being implemented.
In addition, I am pursuing a variety of manpower reductions in the Ministry of Defence Headquarters, including the Procurement Executive. In total, I intend to reduce civilian staffs, as a result of the latest expenditure review, by some 10,000, and 3,000 direct job opportunities will be lost in the defence industries. But there will be no reduction of the numbers of Service men.
I would be failing in my duties as Secretary of State for Defence if I did not pay a tribute to the civilian staff of the Ministry of Defence. The volunteer basis of the Services gives us highly-professional long-service forces manning the key operational and supporting areas. But it has long been the policy of all three Services to employ civilians to the maximum extent compatible with the efficiency of the forces and with economy. A considerable body of civilians, equally qualified, devoted and long-service, are accordingly to be found carrying out a vast range of duties—industrial, technical, professional and administrative—in a


wide variety of establishments in the support and administration areas.
I have had to cut the numbers of my civilians by a total of 40,000 in the defence review and the latest public expenditure exercise. I did so because it was preferable—in spite of the risks involved—to make cuts in the support and administrative areas rather than in the front line. I hope that my hon. Friends, particularly those below the gangway, will recognise that this will be a painful exercise, but I wish to reassure them that I shall do all I can to ease the problems as much as any good employer can. And I hope to make the reductions I have outlined with the support and co-operation of the staffs concerned.
I have, of course, given our NATO Allies full information about these further reductions, and the NATO staffs are examining them, consulting us, where necessary, about the details. I appreciate the concern expressed by the Defence and External Affairs Sub-Committee about the effects of reductions in defence expenditure on the security of the Alliance. But I can reassure the House that our Allies have recognised the pressing economic circumstances that made the latest public expenditure reductions necessary. I am confident that these reductions will not affect, quantitatively or qualitatively, our essential contributions to NATO, or our rôle within NATO.
That said, I should like to congratulate the Sub-Committee on the very thorough way in which it has digested the mass of material which my Department has provided for it, at its request, on the defence review and subsequent measures, and on its perceptive reports on defence. Obviously, I do not agree with all its comments and conclusions—to which I shall shortly be replying—but I recommend hon. Members to read, if they have not done so already, the balanced account given in the Second Report from the Expenditure Committee of the problems with which my colleagues and I are grappling.
Since assuming office, I have been determined to produce a coherent framework—in military, strategic and political terms—for our future defence policy. I have transformed our defence strategy from one which was diffuse and worldwide to one which has a single major objective—that of Britain playing her full part in helping to safeguard the security of the

Alliance and the security of these Islands. I have transformed a 10-year defence programme, which was escalating rapidly in cost, to one which will maintain our security at a lower and more stable level of resources.
I shall have saved, at 1975 prices, £2,800 million from 1976 to 1980, for investment and for improving the balance of payments. Progressively over a period, and with a full sense of responsibility towards the security of the Alliance, I have reduced the defence budget, so that in real terms it will be smaller in 1978–79 and 1979–80, than it was in 1970–71. I have fulfilled up to the hilt the undertakings given in the Labour Party manifestos of 1974.

Mr. Frank Allaun: My right hon. Friend is misleading the House. The reduction is only in projected expenditure. Compared with this year's spending there is a real increase. I refer my right hon. Friend to page 133 of the Public Expenditure White Paper, which shows that at 1975–76 prices we shall be spending £224 million a year more on defence by 1979–80 than we are spending this year.

Mr. Mason: My hon. Friend is misleading the House now, and he is also misleading it in his amendment. Therefore, I shall take a little time to correct him.
First, if my hon. Friend refers to table 4.1 on pages 132–133 of the White Paper to which he referred, he will recognise that the figures given are not budget estimates. They are not defence budget estimates in particular. The White Paper says:
Estimates on a comparable basis for future years are derived by adjusting volume estimates (at 1975–76 prices) to take account of estimated trends in relative prices of certain elements in costs, particularly wages and salaries and housing and construction costs; in practice there can be a good deal of fluctuation about trends, and these estimates are not forecasts for specific years.

Mr. Frank Allaun: What the hell does that mean?

Mr. Mason: Perhaps my hon. Friend would care to transfer his sort of thinking on to the social services, where he has been creating a fuss, saying that they have been cut. He will see that on the basis of that thinking, spending on education will increase by £191 million, spending on health by £693 million and spending on


the social services by £523 million. Therefore, I wonder why my hon. Friend and some of his hon. Friends have been making a fuss about cuts in social services. He is misleading the House.
If my hon. Friend looks at the defence expenditure budgets, he will see that last year I cut back £370 million, and I am saving £470 million on projected defence expenditure during the course of this year. Therefore, I am year by year progressively reducing the defence burden and carrying out the manifesto to the hilt.
Of course, these savings have not been made without cost in terms of jobs not only for Service men and Ministry of Defence civilians but for workers in the defence industry. I know that my hon. Friend and his colleagues do not want to increase the unemployment rate. Therefore, they will not want to slash defence expenditure as rapidly as they initially thought.
Let me give the facts. As a result of the Defence Review and the PESC exercise, 78,000 jobs will be directly affected. That is, 38,000 Servicemen and 40,000 civilians. In the defence industries, job opportunities will be some 60,000 fewer by the end of the decade than they would have been, with perhaps as many as 80,000 further job opportunities indirectly affected.
It is too often forgotten how important defence orders are for British and European industries. As many as a half of the 140,000 workers employed by the major companies in the British aerospace industry are currently engaged on military contracts either for the Ministry of Defence or for foreign Governments. These industries generate a further 140,000 jobs among sub-contractors, of which about 70,000 are on defence work.
In British shipbuilding about a quarter of the 70,000 workers are building ships either for the Royal Navy or for foreign Governments, and they are mainly in development areas such as Clydeside, Tyneside and Merseyside. At least as many workers again are employed in the associated industries as a result of defence work, and in some specialised areas the number can be as high as four times the number directly employed in the shipyards.
Therefore, I must warn everybody who wants to slash defence expenditure on the scale suggested by my hon. Friends that rapid, rash and arbitrary cuts in defence expenditure could seriously aggravate unemployment—very often in development areas where alternative employment is not readily available.
Britain plays a very full part in the consultations within the Alliance, at all levels. The Defence Planning Committee and the Nuclear Planning Group continue to study problems associated with possible defensive use of nuclear weapons by NATO and to develop the political guidelines within which NATO's strategic and theatre nuclear weapons contribute to its strategy of deterrence.
The Eurogroup had a very active year under my chairmanship. I particularly welcome the establishment of a new forum—the European Programme Group. In this Group all the interested European members of the Alliance, including France, are seeking to pursue with greater rigour and effectiveness the arrangements for defence equipment procurement among the Europeans within the framework of the Alliance. I very much welcome the French decision to participate in the work of this group. I am sure they will make an important contribution to the achievement of better equipment standardisation, including the establishment of more equitable trans-Atlantic arrangements, such as development of the two-way street between Europe and the United States.
Britain also has a key rôle in the Alliance. We commit almost the whole of our combat forces to the Alliance, and, unlike our European Allies, we rely entirely on full-time, volunteer, professional Service men. The extent of their professionalism is a matter of pride to all of us who have seen the way Service men have conducted themselves in the difficult conditions of Northern Ireland and on the high seas off Iceland. They in turn are backed up by about 300,000 civilians, and nearly 250,000 reservists, all to be drawn on for essential tasks. The quality of our contribution to NATO is second to none.
We commit 55,000 troops and a large tactical air force forward, in West Germany. We contribute some 70 per cent. of NATO's immediately available maritime forces in the Eastern Atlantic and


Channel areas. Moreover—and this is appreciated by NATO—all our major equipment programmes are intact following the defence review and the subsequent public expenditure cuts.
Above all, we ensure that we can always maintain the security and territorial integrity of the United Kingdom and help toward the maintenance of peace in Northern Ireland. No praise is too high for the way in which the Army is tackling its difficult and dangerous job in Northern Ireland in guaranteeing this peace. I am sure the whole House will join me in expressing our thanks to the officers and men who are doing such sterling work under the most arduous and trying conditions.
We are also playing our full part in improving the quality of our forces. I should like quickly to mention one or two examples.
Of highest importance in the maritime field are the anti-submarine warfare cruiser and nuclear-powered fleet submarine programmes. With the Nimrod, they will form the core of our future antisubmarine warfare capability. The ASW cruisers are essential if we are to deploy Sea Kings, each with an ASW capability equivalent to that of a frigate, in the most cost-effective way. As the House knows, I have decided to develop the Sea Harrier, which will enhance flexibility in deploying the ASW surface task forces and to develop the Sea Skua helicopter-launched anti-ship missile. We have also opened negotiations for the purchase of the American submarine-launched anti-ship missile Sub-Harpoon.
I announced last autumn my decision to procure the Milan infantry anti-tank missile if the terms were right. This will replace a number of obsolescent equipments, and will give the infantry a weapon which is lighter, can be operated by two men and has a far greater effective range and lethality. We hope to start series production of the collaborative 155 mm. gun next year, and later of the self-propelled version, the SP70. The three partners will use the same ammunition, and it is planned that even those of our NATO partners who are developing their own guns, such as the Americans, will be able to fire our ammunition and vice versa.
I am particularly pleased that I have been able to announce our readiness, subject to negotiations with our collaborative partners, to order 385 swing-wing multi-role combat aircraft which will give the RAF a low-level strike aircraft and a new all-weather air defence fighter. All the alternatives to the MRCA air defence variant have been examined but, quite apart from the foreign exchange and industrial considerations, none showed any worthwhile overall advantage in financial and operational terms over the MRCA air defence variant, which will meet the operational requirement and represent better value for money than any other. As a British aircraft, it will provide many more jobs than any alternative.
The MRCA project is vital for the future of the British aerospace industry. It will employ at peak some 10,000 at BAC, 6,000 at Rolls-Royce and 8,000 in work on equipment and avionics. Indirectly it will probably employ another 12,000. But it has an even wider significance. It is outstandingly the most important European collaborative venture in the military field, and it is of cardinal importance to the future cooperative production of defence equipment within the Alliance. It will be a major step forward in standardisation both within the Royal Air Force and with other major European NATO air forces.

Mr. Dalyell: I declare a constituency interest, in that much of the work done in Britain on the MRCA is done by the Cameron Iron works at Livingstone. Would the Secretary of State confirm that if there is a separate Scottish Air Force it is less than likely that orders will come to Scottish industry and that industry in England or France or Germany would be preferred?

Mr. Mason: I can only reply to my hon. Friend that I will await his contribution and I will be able to give him a considered reply. I do not want him to be using this defence debate in order to try to score points over the Scottish nationalists.
Though our efforts and contributions to the forces of the Alliance are of the highest importance, Britain does not, of course, stand alone against the might of the Warsaw Pact—contrary to what some right hon. and hon. Members opposite


would have us believe. We are members of an Alliance, and in playing our full part, we add to the strength and cohesion of the Alliance and our security and our freedom are inseparable from that of the other members of the Alliance.
There are many who question whether our security and our freedom are at risk. A generation is now coming into positions of influence and responsibility which has no personal memories of the horrors of war. Too many people sustain the comfortable belief that their freedom—and security—are not threatened. They seem to think that there is no need for them to pay the price of the insurance policy for the preservation of our freedoms.
For this reason, this generation is much more inclined to question the whole concept of NATO and to consider expenditure on the nation's security as wasteful. It is encouraged by people who, for a variety of different reasons—some good and some bad—would like to reduce our defences drastically. I do not have to tell the House how fundamentally I disagree with those who argue in this way, and I wish to explain why.
First, there is the question of whether we are threatened. In his speech to the Communist Party Congress on 24th February Mr. Brezhnev said that the Soviet Union had no hostile intentions and that the Soviet Union threatened neither East nor West. But there are at least two reasons why we cannot take those statements wholly on trust. The first concerns the capability of the Soviet Union to pose a political or military threat if it chose to do so. The second concerns the evidence available for evaluating the Soviet Union's possible intentions. We must remember that its capability to pose a threat is to some extent a function of the capability of the Alliance to meet it, and that its perception of our capability can also influence its intentions.
I have set out in my White Paper, as objectively as possible, the facts about the military balance between East and West in Europe and in the Atlantic. I will not seek to elaborate on these facts in this debate, but I should like to put the numbers into perspective. First, the balance of forces in the areas of most

concern to Britain—though not exclusively to us—has tilted a little further in favour of the Warsaw Pact. This is a trend that we shall have to watch very closely. But this we are doing. NATO is armed and watchful. NATO's strategy, based on the triad of conventional, tactical nuclear, and strategic nuclear forces, provides an effective deterrent against any level of aggression.
Secondly, as I have stressed in my White Paper, the quality advantage of the Alliance's forces is being eroded. The Soviet Union has made striking qualitative advances in nuclear-powered submarines, infantry combat vehicles and new offensive aircraft. But NATO, too, has made a number of significant improvements in the fields of anti-submarine warfare, armour and anti-tank weapons and anti-aircraft capability.

Mr. Russell Johnston: The right hon. Gentleman has referred to antitank capability and also to the diagrams in the White Paper about the balance of forces between East and West. Can he say anything more specific about the anti-tank capability of NATO? The preeminence of the East in terms of its tank capacity is shown in this column to be immense. Would NATO have the capacity to respond?

Mr. Mason: The reason I mention anti-tank weapons in particular is that being introduced now throughout the Alliance are the new anti-tank weapons HOT, TOW, Milan, the one we hope to purchase with the French and Germans, and the Carl Gustav. A whole range of anti-tank weaponry is being produced.
Thirdly, the degree of regimentation imposed by the Soviet Union within the Warsaw Pact has, as a by-product, a very substantial degree of standardisation on Soviet equipment, but at a political price which no NATO country would dream of imposing or paying. Nevertheless, we are making considerable progress in increasing the standardisation and interoperability of NATO equipment. The MRCA will make a major contribution. So will the four-nation procurement of the F16, the purchases of Lance missiles, the introduction of new artillery by three nations and our purchase of Milan if the terms are right.
Fourthly, the Warsaw Pact enjoys geographical advantages over NATO particularly in reinforcing troops in the forward area of Central Europe. Its lines of communication have been improved in recent years, and are relatively short compared with the distances over which American reinforcements would have to travel. Although this is a serious problem for NATO, it is one that we have lived with throughout the history of the Alliance. It is always taken into account in NATO's planning.
Fifthly, our latest studies of Soviet military expenditure indicate that Soviet spending on defence is greater than we thought. But the House should not draw the wrong conclusions. We know from our observations that we have not similarly underestimated the size of the Warsaw Pact forces. So these forces which we have observed are costing the Soviet Union much more than we thought was the case. I draw two conclusions: on the one hand that Soviet defence industry is less efficient than we had thought: on the other that the Soviet Union is perhaps more prepared than we had thought earlier to keep its economy at a high level of defence activity, irrespective of the price its people have to pay by way of lower living standards.
Finally, our greater knowledge of the Soviet armaments industry indicates that the development and production of armaments in the Soviet Union absorbs a lot of men, machines and materials. This deprives the agriculture and consumer industries of resources and implies a degree of repression of consumer choice which would be impossible in the West. I shall be releasing quite soon a significant paper on the Soviet arms industry so that the House can judge for itself the extent of Soviet investment of resources in armaments.

Mr. Ron Thomas: Before my right hon. Friend leaves the subject of NATO, in the light of Britain's current economic and industrial problems will he say a word of justification for the proportion of gross national product that we spend on defence as against our NATO Allies and also about page 84 of the White Paper, where we are given details of the drain on the balance of payments—about £400 million a year—in West Germany, a country

which is sitting on massive gold and convertible currency reserves?

Mr. Mason: I know my hon. Friend's views on defence. He will have noticed, of course, that last year our defence expenditure as a percentage of GNP was 5·75. This year, we are bringing it down to 5·5. So we are beginning to carry out the political commitment that we made to the electorate.
My hon. Friend can choose any statistic he likes to present his case. However, if he considered the expenditure per head in dollars, he would find that the figures were: Britain 214, Netherlands 220. Norway 228, France, 255, Germany 332 and the United States 416. He could also consider total levels of defence expenditure. These will show that we spend $12,000 million, France spends $13,500 million, Germany $19,700 million and the United States $89,000 million. So there are many figures which could be used. I always express defence expenditure as a percentage of GNP because that is the NATO yardstick by which we are judged.

Mr. E. Fernyhough: Will my right hon. Friend give way on that point?

Mr. Mason: No, I had better get on.
Neither should we forget that the Soviet Union maintains large numbers of troops in Eastern Europe not only to confront the West, but in pursuance of the doctrine of the limited sovereignty of Communist nations within the bloc. The numbers of these garrison troops are much greater than seem necessary to our eyes. But Russia has always been obsessed by its own security; and this obsession is, I believe, as strong today as it has ever been. We should remember that the Soviet Union faces not only west and north towards NATO, but to the east and south towards China; and it maintains large numbers of ships, men and aircraft because of its rivalry with the People's Republic of China.
We in Britain would also do well to remember that we are being constantly watched by the Soviet Union. On average, once or twice every week, Soviet long-range Bear reconnaissance aircraft trip our own air defences and are intercepted by our air defence aircraft. By constant round-the-clock vigilance we are ready to deal with any potential violations of


our airspace. Yet even from outside our airspace, through satellite and aerial reconnaissance, the Soviet Union keeps a constant watch on Britain and on all the other Allies. NATO, in its turn, is no less watchful.
What is the precise nature of the threat which the Alliance is facing? It is, I believe, a political threat, There is no evidence that the Soviet Union is planning to launch a military attack upon the West. The deterrent forces of the Alliance are too well prepared, too well equipped and too well co-ordinated and politically directed for anyone but a lunatic in the Kremlin to contemplate military action against Western Europe.
In a period of tension, it must be realised that a vast array of offensive arms would be alerted—submarine-launched Polaris and Poseidons, intercontinental ballistic missiles, hundreds of long-range aircraft—all pointing to the heart of the Soviet Union. In addition, all the tactical nuclear forces and all the conventional forces of the Alliance would be similarly on the alert. There is still a frightening capability in the Alliance to inflict unacceptable damage on the Soviet Union.
But the use of political pressure, backed by the threat of military force, against any weak spot in the Alliance is a much more credible form of threat. I should now like to examine whether the Soviet Union also has the motive or intention to pose such a threat. Mr. Brezhnev said on 24th February that detente did not in the slightest abolish, nor could it abolish or change, the laws of the class struggle. He also said that the Soviet Union saw detente as a way of creating more favourable conditions for the building of "Socialism" and Communism.
It is a fundamental tenet of Communist belief that this struggle between the Communist and the Western democratic systems must end in the triumph of the Communist system and that it is the duty of every Communist and Communist Government to work for that victory by all means at their disposal. Communists in many countries are even prepared, on occasions, to subordinate national sovereignty as well as individual freedom to what they regard as the higher ideal of the triumph of the Communist system.
Faced with such fundamental beliefs, the Alliance can only act on the assumption that the Soviet Union has the motive—perhaps even the intention—as well as the political and military strength, to take advantage of any political or military weakness displayed by the members of the Alliance, individually or collectively. But I believe, as I have indicated, that the Alliance is strong and cohesive and ready to deter any threat from the Soviet Union, political or military. The United States will continue to maintain strategic nuclear parity with the Soviet Union no matter at what level of strategic nuclear forces. In tactical nuclear weaponry the Alliance has significant advantages over the Warsaw Pact. In conventional strength, while we must be constantly on our guard against further erosion of the military balance, the Alliance's maritime, land and air forces, including those of the United States and France, provide adequate deterrence against any threat, political or military, that the Soviet Union might pose.

Mr. Neville Trotter: Would the right hon. Gentleman comment on the suggestions by Brigadier Close and General Steinhoff, that with conventional weapons the Russians could reach the Rhine in two days and that in that time the United States would hesitate for fear of starting a nuclear war?

Mr. Mason: The hon. Member is referring to an essay, not a report. It has no credence in the NATO military councils. It will not go before the Military Committee of NATO. It was one essay by an officer.
As far as a surprise attack is concerned, with satellite photography and constant, non-stop, surveillance, a conventional surprise attack is much more difficult to launch today than ever before.
What of detente, that is, working towards a consistent relaxation of tension between East and West? We need to consider who is serious about detente. Ought the Alliance to conclude from Soviet capabilities and from our analysis of its possible intentions that detente is a sham, to be rejected out of hand because we suspect Soviet motives? Should we conclude that detente has been from the outset a pre-planned confidence-trick, a


means of lulling the West into carelessness while the Soviet Union gains all the technology it needs until it is ready to cause the political collapse of Western society by subversion, political pressure and the threat of war?
We do not, of course, know whether the Soviet Union is becoming reliably more friendly. But equally we do not know that it is not. If we do not know, it is extremely foolish to close our minds to the possibilities of detente. We must remember that detente can bring advantage right across the spectrum of human relations to the West as well as to the East.
Our interest in a safe world, in the avoidance of war, is as great as, if not greater than, the Soviet Union's. At the same time it is in our interest to develop contacts and communications with the Russians and the other East Europeans in order to minimise misunderstanding and miscalculations of each other's points of view. We should also continue to arrange closer contacts between the peoples of East and West. This is not easy but it is particularly here, in the Western view, that the heart of detente lies.
The Soviet invitation of observers from Greece and Turkey to Exercise Caucasus at the beginning of this year may be a small beginning, but it can also be seen as the beginnings of a possible breakthrough. It may be an indication that the Soviet Union is trying to implement the confidence-building measures agreed at the Conference on Security and Co-operation in Europe. Equally, we should remember that the Soviet Union does not have everything its own way, for example, in the Middle East and particularly in Egypt, and in Portugal, as well as in some cases within the Warsaw Pact's borders.
The alternative to detente is a return to the cold war, and the assumption that war, with all the unspeakable horrors which would accompany a war in Europe between East and West, could be a likely outcome. No one in his right mind wants that, not least because it would mean rapidly increasing defence expenditure and the awful consequences of another frightening arms race. So we must all, East as well as West, aspire to a real relaxation of tension. We

already benefit from detente. We have better relations with the Soviet Union and the rest of the Warsaw Pact than we had during the cold war. But we must not deceive ourselves that progress in detente will be easy, or that we can hope to make progress from a position of weakness. There can be a real relaxation of tension only if there is a secure balance of power and an equilibrium of forces between East and West.
The NATO Allies must therefore be strong and secure and we must play our full part in keeping the Alliance strong and cohesive. I believe that we have that strength and that security. We must now force the Soviet Union to demonstrate that detente is not an empty word or a deceptive peace offensive to cause the West to relax its guard.
The Soviet leaders are, of course, very sensitive because they know that 1976 will be a year in which the Soviet Union will be put to the test over detente. There are so many things which the Soviet Union could do to show that detente is genuine. The Soviet leaders could make a reality of the Conference on Security and Co-operation in Europe by allowing freer movement of people and ideas between East and West; they could make real concessions in the negotiations in Vienna on MBFR by reducing significantly the disparity in men and armaments there is in central Europe; they could show willingness in the SALT Talks to reduce, by agreement with the United States, the level of strategic arms and the over-kill on each side; they could dismantle the Berlin Wall, that monument of shame, that confession of all the inadequacies and viciousness of a repressive regime. These are only a few of the things which the Soviet Union could do in this year of trial.
So, I conclude: our precious freedoms must be safeguarded. It is my firm belief, my firm conviction, that the North Atlantic Alliance is the key to this. Britain is no longer the imperial Power she once was. We no longer have the strength to go it alone. Not even the massively powerful United States enjoys that sort of strength.
We are bound to judge how much effort we can put into our defences, not only against the threat, but also in relation to the strength of our economy. The balance is a difficult one, but I think that we have


now got it about right. I do not want our teeth arms—our real contributions to the fighting forces of the Alliance—to be further eroded. But, above all, we must act in concert with our Allies. We have to help to maintain the cohesiveness of that Alliance. And we must continue to regard Western defence as one and indivisible.

5.4 p.m.

Mr. Ian Gilmour: I beg to move, in line 1, to leave out from 'House' to the end of the Question and to add instead thereof:
'recognising that the previous year's defence cuts reduced the defences of the United Kingdom to "absolute bedrock" and being aware of the continued growth of Soviet military strength and of the increasingly unfavourable military balance between NATO and the Warsaw Pact, condemns the Government's proposals to reduce the United Kingdom's defences for the third time in a year'.
The Opposition certainly join the Secretary of State in his praise of our Armed Forces. In particular we would agree entirely that no praise is too high for what they are doing in Northern Ireland and in the Cod War. I also join him in what he said about the civilian staff of the Ministry, which is an extremely efficient and dedicated body. In the same breath I should like to add a word about the late Sir Michael Cary, whose sudden death was a great blow to the Ministry. Everyone who knew him, knew him as a most gifted, talented and hard-working public servant. While we are paying tributes it would be wrong to let the occasion pass without doing so to Field Marshal Viscount Montgomery, the greatest soldier we have had for many a long day, who died a few days ago and whose funeral takes place tomorrow.
As the House will have easily detected, there is a fundamental flaw in the case that the Secretary of State has attempted to deploy this afternoon. The general drift of his speech and of the Government's misleading motion is that the latest round of cuts can be shrugged off because, by some mysterious sleight of hand, they do not really damage defence capability. But, apart from its inherent implausibility, there is this fundamental defect which the right hon. Gentleman did not face. If what he said today is right, he was talking frivolous nonsense last year. If what he said last year was

right, he was talking nonsense, or something rather worse, today.
Let me remind the House of the Government's line until quite recently. The Secretary of State used to tell us that a succession of short-term cuts was the worst possible method of dealing with our Allies, with the Services and with our military capabilities. I will tell him that a much worse way of dealing with them is to impose massive long-term cuts on the Services and then in addition to impose a succession of short-term cuts. That is the method that has been adopted by the right hon. Gentleman.
He used to tell us that he would not have piecemeal cuts. He said that he was therefore carrying out a defence review and he was not over-modest in his claims for it. At various times he described it as
the most extensive and thorough review … ever undertaken … in peace time".
He said that it was
the most severe examination … ever mounted in peacetime".
Heaven forbid that he should ever undertake a defence review in war time. The "most comprehensive examination" was another of his descriptions. He told us that the review
entailed a rigorous and fundamental analysis of every aspect of Britain's commitments and capabilities.
He said on another occasion,
we analysed every aspect of our defence policy. That is why our review has taken so long".
Unfortunately the Chancellor of the Exchequer was not impressed by all that, and in his Budget last year he imposed a short-term, piecemeal cut of £110 million on the enormous £4,700 million cut imposed by the Secretary of State for Defence. That latter figure has now increased, because of the Government's inflation, to well over £6,000 million. Last year the Government's principal defence adviser, the Chief of the Defence Staff, pointed out that our defences were down to "absolute bedrock" which is the origin of the phrase in the amendment.
Yet the House is now being asked to believe that the Chief of the Defence Staff was wrong, that far from the Forces being down to absolute bedrock they are featherbedded; and that last year's


review, the most rigorous, comprehensive, thorough, fundamental and far-ranging review ever undertaken, was incredibly incompetent and grossly misguided, and while it greatly alarmed our Allies and savagely cut our front line, it quite forgot to cut the tail.
As a happy result, when the Chancellor of the Exchequer demands another piecemeal short-term cut in defence expenditure of £534 million over three years, the Defence Secretary is able to find that money by, as the Government's motion put it, cuts which
will fall on support services rather than on front-line forces".
What a delightful coincidence. If it had not been for the Chancellor's mismanagement of the economy and his consequent demand to the right hon. Gentleman to cut defence expenditure, the Forces would apparently have been left with far too much tail. But the Chancellor's mismanagement and ineptitude has enabled the right hon. Gentleman to rectify that. How monstrously convenient. Rarely has the House been asked to believe anything so implausible.
The right hon. Gentleman cannot have it both ways. Either he made a complete mess of his review last year or he did not, in which case the cuts which he is making this year are very damaging. The right hon. Gentleman has to choose between those two explanations. There is no other way. I have no doubt that the second is right.
The White Paper is a cover up. It is what the Americans call a snow job. I shall show later why that is so. Any genuine economies—that is, those which lead to less overmanning and greater efficiency—we welcome. But cutting support and allegedly leaving the front line as it was is not a genuine economy and is a deception. As Dr. Kissinger said last week in Dallas:
The belief that there is an unlimited amount of fat to be cut in the defence budget is an illusion. Reductions almost inevitably translate into a reduction of effectiveness.
The rigid distinction which the motion seeks to draw between the front line and support, or between the teeth arms and the tail, has very limited validity. As has often enough been pointed out, there is no known animal which has only teeth and a tail. What is often called tail in

defence is in fact the backbone, the muscles, and other vital parts.
There is not much point in having front line units which look strong if their weapons are not fully up to date, if they cannot be transported to the place where they are required, if they do not have enough fuel to move about when they get there, if they do not have enough spare parts to keep their equipment serviceable, or if they do not have enough ammunition to fire their weapons as often as they need. Those are the functions of the support arms, and indispensable they are. It is untrue to suggest that to cut them does not harm our contribution to NATO. Of course it does.
By cutting supplies over these last two years the Government are doing only one thing. They are reducing the time during which front line units are able to carry on the battle. Therefore, they are bringing forward the nuclear stage of the battle. That is the result of the Government's cuts. The right hon. Gentleman knows that he is thus acting in direct contravention of American strategy and the objectives of NATO.
The White Paper rightly describes NATO as the "corner-stone of our security". Deterrence, to be credible and effective, as we know, depends on three inter-dependent elements—sometimes known as the triad—of conventional forces, tactical nuclear forces and strategic nuclear forces. Each has an indispensable part to play.
The strategic element clearly depends pre-eminently on America. The tactical nuclear element, again primarily dependent on American resources, provides the essential link between the strategic nuclear and the conventional forces and, finally, the conventional leg to which we make our main contribution.
America plays a crucial part in all three elements, so one of Russia's prime strategic aims is to disrupt the Alliance between Europe and the United States. That is why we have so important a part to play in preventing the creation of conditions in which the United States might be tempted to leave NATO.
We can do this best by maintaining and improving our contribution to the conventional forces and thus reducing reliance on early recourse to nuclear weapons—in other words, keeping the nuclear


threshhold high—which is a pre-condition of continued American participation. Unfortunately, the Government's policy points in exactly the opposite and wrong direction.
The White Paper describes some measures to meet NATO's requests at no extra cost. But they are "chicken feed", to use the expression of the hon. Member for Salford, East (Mr. Allaun), compared with the savage cuts that the Labour Government have made in our contribution to NATO in the sea, on land and in the air.
I think that we all agree with what the Secretary of State said about the Defence and External Affairs Sub-Committee. In its extremely cogent, well-argued and informative Report on the cuts—the Committee was writing before the latest cuts—it states
NATO's response to the review proposals, made by the Secretary-General and by individual allies, was to express regret that any cuts had been made. There was concern that the scale of reduction would effect the already unfavourable balance of conventional forces between NATO and the Warsaw Pact. The reduction of reinforcement capabilities on the northern and southern flanks; the removal of naval and air forces from the Mediterranean area; and the decline in maritime capabilities in the Eastern Atlantic and Channel areas in particular were viewed with disquiet".
As to the Mediterranean, there is a connoisseur's paragraph in the White Paper—paragraph 8 of Chapter II—which says:
Resulting from the concentration of our forces in the … Atlantic and Channel areas, Britain's … forces will cease to be assigned to NATO in the Mediterranean from April 1976.
Translated into truthful English, that sentence means that, resulting from the Government's cuts of one-seventh in our frigates and destroyers, the Navy is having to evacuate the Mediterranean.
The paragraph continues:
Our only permanent ship presence in the area will be a Gibraltar guard ship. However, Her Majesty's ships will continue to visit the Mediterranean from time to time".
So under the Labour Government, the Mediterranean for the Navy becomes like the China Seas or Tierra del Fuego—a place where the Navy may visit from time to time. If the right hon. Gentleman is here long enough, perhaps he will be writing in his White Paper next year

that Her Majesty's ships will from time to time be visitng the North Sea and the English Channel.
Whatever arguments there may be about the blitzkreig theory on the central front—obviously more than one view can be taken about it, but I do not share the right hon. Gentleman's total complacency—I share the recently reported views of General Steinhoff, lately Chairman of NATO's Military Committee, that there is another option open to the Russians—an attack on the flanks which might appear to them to involve only slight nuclear risk.
The Northern flank is tremendously important to the United Kingdom, since it embraces both our North Sea oil and vital sea approaches.
The NATO Commander-in-Chief Northern Europe, in a lecture to the RUSI last week, said that the Government's cuts in air and amphibious transport are even more serious than the reductions in numbers of reinforcements. Previously, as he said, he could expect to receive the United Kingdom mobile reserve, a division of three brigades, the United Kingdom's joint airborne task force, the commando brigade, and Royal Marines. In future he would have only an air portable brigade and a commando group with greatly reduced air transport, amphibious capability and escorts. Nowhere in NATO, he added, was there such a serious imbalance between the conventional forces of the two sides.
Well might the Defence Sub-Committee say,
The United Kingdom's contribution to collective defence cannot be significantly reduced without raising a serious loss of confidence among members of the NATO Alliance, on which our national security depends.
Our forces are small and our reserves are few … We consider that the House should we aware of the consequences for our defence capability and for our contribution to the NATO Alliance if further major cuts were to be imposed.
Since then, further cuts have been imposed, though certainly not for defence reasons. My hon. Friend the Member for Ayr (Mr. Younger) last year destroyed the idea that defence spending should be determined by the size of the gross national product. I thought from some of the Secretary of State's remarks today that he was partially converted. He


spoke far better sense on this subject today than I have ever heard him speak. However, it is the left wing of his party who still remain convinced. They seem to think that GNP is a sort of gun, a weapon that one can fire in order to impress one's potential opponents. It is, of course, nothing of the sort. It is a blank. What impresses our potential opponents is the effectiveness of our forces, not the proportion of GNP that they represent.

Mr. Fernyhough: Surely the right hon. Gentleman will readily admit that no nation can be military strong if it is economically weak. What my right hon. Friend the Secretary of State is doing is what the late Sir Winston Churchill did in 1952. He substantially cut back the 1951 rearmament programme of the Labour Government, and he did it on the basis that the country could not economically bear the sacrifices that that programme demanded.

Mr. Gilmour: No doubt what Sir Winston Churchill did was right. What the right hon. Member for Jarrow (Mr. Fernyhough) and his hon. Friends do not recognise is that they are never guided by experience, because over the last 12 years the Labour Party has made almost a profession of defence reviews and defence cuts. I challenge the right hon. Gentleman to find any single instance where any one of those reviews led to any internal economic improvement in this country. As far as I know, not one of them did so.
Mr. Solzhenitsyn said the other day that Europe was nothing more than a collection of cardboard stage sets, all bargaining with each other to see how little could be spent on defence. He was being unfair to many of our Allies, but what he said was certainly a just judgment on the present British Government.

Mr. Nicholas Winterton: Is my right hon. Friend prepared to comment on the use of a British Rail ferry to transport marines for a NATO exercise in Northern Norway? Is that indicative of the strength of the British and NATO forces?

Mr. Gilmour: That is certainly a fair comment.
Of course, defence spending should be determined—as I would think the Secretary

of State is beginning to realise—not by some arbitrary assessment of what our Allies spend but by the nature of the threat that we face and the strength of Russia and the forces of the Warsaw Pact. That is something that the present Government refuse to accept. As the military balance tilts further against the West, the Government cut our defences. Because the right hon. Gentleman knows perfectly well that there is no logical or defensible connection between what is going on in the world and what he is doing to our defences, he has to put in what one may call bridging sentences, sentences which try to bridge the chasm between the reality of international politics, which should forbid defence cuts, and the illusion that it is safe to make those cuts.
Let me take, for example, paragraph 3 of Chapter I of the White Paper, and in particular this sublime sentence:
The British Government believes that, if all governments make a real and sustained effort to observe the standards of behaviour drawn up at Helsinki, then the prospects of achieving increased co-operation and confidence between East and West, based on tolerance and mutual understanding, will have been valuably and visibly enhanced.
That should certainly put the fear of God into Marshal Grechko.
Here we have the Secretary of State, who concedes in those speeches, when he is not attacking my right hon. Friend the Leader of the Opposition for what she has said about the Soviet threat, that what she actually said is true, wheeling his armoury on to the parade ground to give comfort to ourselves and our friends and to strike respect in the breasts of our enemies. And what is his secret weapon? It is the most monumental tautology ever perpetrated.
I suspect that if that sentence means anything at all—and I do not think that it does—the meaning could be summed up like this: if the Soviet Union starts to behave a little more like we in the West behave—or, in other words, like a free society—we shall stand a better chance of getting on with them. Quite so. No doubt the same would be true if the Soviet Union applied to join NATO. The White Paper does not go quite so far as to envisage that possibility.
Since my right hon. Friend the Leader of the Opposition made her famous speech in January, her warnings have


been widely confirmed—by the Supreme Allied Commander in Europe, General Haig, by Mr. Schlesinger, by Mr. Runs-feldt, and by the American defence budget and the German defence budget, and by many other authorities. As General Haig has said, there has been an explosion of Russian military capabilities. This is true of both quantity and quality. The Secretary of State admitted the other day, and again this afternoon, that we now know that the Russians have been spending far more than we thought, particularly over the last three years. There is another explanation to that which he gave. That is that the quality of their equipment is greatly improving. That is one of the explanations for the increased expenditure.
Indeed, comparing the figures of strength in this year's White Paper with those in last year's White Paper, although one cannot make an exact computation, I think that the right hon. Gentleman will agree that the balance has tilted against us by about 8 per cent. That is based on a rough comparison of the two diagrams, last year's and this year's.
Moreover, Marshal Grechko has recently made it clear that so far from so-called détente leading to a slackening of the Russian military effort, Russia will become even more of an arsenal than she is at present. Russian behaviour in Portugal and Angola has shown that while détente may be an aspiration, it is not a fact—or rather, if it is a fact, it is a very one-sided fact indeed.
The response of our Allies to these frightening and disagreeable developments has been predictable and natural. Since the Russians are expanding their forces and since the military balance is tilting increasingly against the West, they have decided to react by increasing their strength. Thus the Americans, the Germans and the French are all increasing their military budget. Only the British Government are out of step. They do not dispute the fact of Russian strength or the unfavourable military balance. They admit it. But, as though suffering from some dire disease of the intellect, they decide that the way to react to the unfavourable military balance is to make it still more unfavourable. They decided last year that the answer to strength was

weakness; and they have decided this year that the answer to yet more strength is yet more weakness.
General Haig said on television the other day,
1 am worried about cuts in defence expenditure whenever they occur in the Alliance, at a time when the strategic environment confirms that additional, not lesser, efforts are needed.
That is the only sane reaction to what the Russians are doing, yet such is the insane world of British Socialism that the Government do the precise opposite.
Even if the cuts were as cosmetic and as little damaging to our forces as the right hon. Gentleman claims—and they are not—they would still be damaging to the Alliance. To cut at all when everyone in Europe knows perfectly well that this is the time not to cut but to expand damages our position in the eyes of NATO and damages NATO itself. The Secretary of State knows that cuts of defence expenditure in NATO have a domino effect, and he has mentioned that danger in speeches. Despite his knowledge he regularly knocks his own domino down every year regardless of the consequences.
Some people say that we should not criticise the Secretary of State because, after all, even though Labour has been in power for two years we still have some armed forces left to defend us, and that if the right hon. Gentleman had not been in his present office, the cuts would have been very much worse. They say that if the Tribune Group had had its way, we would be lucky if we were left with more than a detachment of the Clay Cross Home Guard. I take the point. When a "ban-the-bomb-er" trembles on the brink of the premiership, anything is possible within the Labour Party.
But I hardly think that that leaves the right hon. Gentleman in a very heroic posture. Does he agree with the statement that was made by his right hon. Friend the Chancellor of the Exchequer in the days when he was Secretary of State for Defence? His right hon. Friend said:
Once we cut defence expenditure to the extent where our security is imperilled, we have no houses, we have no hospitals, we have no schools, we have a heap of cinders.
It may be true that the right hon. Gentleman has not been the poodle of the


Tribune Group, but he has certainly been the poodle of his predecessor, who now presides so disastrously at the Treasury.
The responsibility is that of the Secretary of State. He made that very clear this afternoon by his almost incesssant use of the personal pronoun in its singular form.
I shall conclude by saying something about the Conservative Party's defence policy. In the past the right hon. Gentleman has expressed some confusion over and, indeed, some interest in the subject. We shall not make the mistake which the Labour Party made and which has wrecked the Secretary of State's term of office. No doubt the right hon. Gentleman would have been an adequate Secretary of State if he had not been hamstrung by his Government's foolish commitment to make savage cuts in defence.
As the right hon. Gentleman knows to his cost, it is impossible for an Opposition to draw up a detailed and fully-costed defence policy when in Opposition. Such a process can be carried out only after full consultation with the Services, with our Allies and with industry. Moreover, the time that it now takes to produce new weapons means that major and sudden shifts are difficult to achieve.
Any Administration is to some extent circumscribed by what its predecessors have done. I am happy to think that the Labour Government's capacity for mischief in defence was limited by what the Conservative Government had done. To give the right hon. Gentleman his due, I have no doubt that he was equally relieved that his hands were tied to some extent.
As my right hon. Friend the Leader of the Opposition said in January,
It is a time when we need to strengthen our defences. Of course this places a burden upon us. But it is one that we must be willing to bear if we want our freedom to survive.
It is in that spirit—

Mr. Mason: Having said that, perhaps the right hon. Gentleman will explain why, as Secretary of State, he cut defence expenditure three times in the final year of the Conservative Government's term of office. He made three cuts amounting to £250 million. At 1975 prices that would

have amounted to £356 million this year. The right hon. Gentleman started the cuts.

Mr. Gilmour: It is true that the Conservative Administration made those cuts, and I regret them. However, I do not think that they provide much comfort for the right hon. Gentleman. He will remember that when those cuts were made the economy was heavily over-heated—[HON. MEMBERS: "Oh".] An overheated economy is better than one that is frozen in stagnation. That is now the state of our economy. At the time that the defence cuts were made we had full employment. We now have stagnation, unemployment, and inflation.

Mr. Mason: We had the three-day week.

Mr. Gilmour: Yes, we had the three-day week, but the right hon. Gentleman will remember that production under his Government has not yet reached the level that was attained during the three-day week. We decided that we should not be able to spend all the money that we had. Secondly, the right hon. Gentleman will realise that we were cutting from a very much higher level than that from which he is cutting.

The Under-Secretary of State for Defence for the Royal Air Force (Mr. Brynmor John): The right hon. Gentleman's Government cut arbitrarily.

Mr. Gilmour: The hon. Gentleman's Government is also cutting arbitrarily. The hon. Gentleman is on last year's point. That attack is no longer available to the Labour Party. Thirdly, as the right hon. Gentleman will admit, the threat has become very much worse over the past two years.
On those three grounds I say that the cuts that the Conservative Administration made offer no defence for what the right hon. Gentleman has done. He has cut on a far greater scale and in far worse circumstances.
It is in that spirit that we shall strengthen our defences in accordance with our strategic requirements. We shall do so in full consultation with our Allies. Under us, defence policy will be decided on defence grounds, not on party grounds. The issue is far too important to be treated in any other way.
We should like to see a relaxation of strained relations. We should like to see balanced force reductions in Europe. We shall be working for that end. However, we believe that those matters will come about only if the Russians see that, in their absence, the West is determined to maintain and improve its strength. They will not be brought about by unilateral disarmament by the West or by this country. As the West German Foreign Minister said the other day,
Why should the Soviet Union be interested in a reduction of its military strength if we lessen our efforts to defend ourselves without asking anything in return?
It is because the Government are running away from that obvious truth that we condemn them. After all, we are seeking to preserve peace by deterrence. That is why the Government's policy and their attempted cover-up in the White Paper are so futile. The Government may succeed in fooling their own party. They may succeed in fooling some journalists and some of the public. They may even succeed, though I doubt it, in fooling some of our Allies. But one thing that we can be quite certain about is that they will not succeed in fooling the Russians.
After all, it is the Russians, not the British public or our Allies, whom we are seeking to deter. The Russians will not be deceived. I hope, too, that the House will refuse to be deceived. I therefore ask the House to reject the Government's motion and to vote for the Opposition amendment.

5.38 p.m.

Mr. Frank Allaun: I wish to speak in support of the amendment on the Order Paper which has already been signed by 83 hon. Members and myself. I am opposed to war and militarism on grounds of humanity. The resultant suffering is the worst evil of war. However, I am pressing my case today on £sd terms, on grounds of hard cash, as they also provide a strong case. The amendment reads:
leave out from 'House' to end and add 'regrets that the Statement on the Defence Estimates 1976: (a) instead of reducing the current arms bill in fact increases it; (b) abandons Labour's election commitment to reduce the proportion of the gross national product devoted to arms to the level of the other European NATO governments: and (c) diverts

money and resources which are urgently needed for education, housing, health, social services and re-equipment of industry '".
What is the use of having colossal military strength and at the same time becoming economically bankrupt? The average family of four in Britain, although it may not realise it, now pays through income tax, VAT and other taxation no less than £8·10p a week to cover the arms bill.
I say to my right hon. Friend the Secretary of State and his Shadow counterpart on the Opposition Front Bench "You cannot pull the same trick twice". The so-called saving is spurious; it is not a cut when compared with this year's arms spending but only when compared with wild projections of arms spending made long ago in a very different world financial situation.
As for the Conservative amendment saying that we have cut arms spending three times in one year, the Tories know that this is arrant nonsense. When in December 1974 the Secretary of State for Defence stated that he was saving £4·7 billion in arms spending, that was given Press headline treatment. In fact, he admitted later in answer to a parliamentary Question tabled by me that arms spending was going up by £200 million that year and was then to be held at that level for the seven succeeding years. I would call that an Irishman's cut.

Mr. Mason: I do not want to have a continual wrangle with my hon. Friend, but why does he describe the defence cuts as "spurious" and sometimes as "phoney" and yet become annoyed and angered by social service cuts made in exactly the same way?

Mr. Allaun: I agree that the cuts in education and other services are cuts in projections. I am saying that what my right hon. Friend puts forward in the White Paper is not a real cut but a cut in projections only and is an increase on this year's spending. I am glad that he has admitted it.

Mr. Mason: Having embarked on a course of cutting back defence expenditure and having accepted that we are cutting back on projected defence expenditure, and the same in regard to social services, housing, schools and so on, will not my hon. Friend recognise that the


defence cuts are now becoming real cuts—in other words that in the next two years they will be real cuts—not spurious, or phoney, or projected cuts—of £36 million?

Mr. Allaun: I am coming to the point. My right hon. Friend is now saying in his White Paper that he is saving £198 million a year by the year 1979–80. I happened to see that information in a handout to the Press which came into my possession on the day on which the Public Expenditure Survey was published. That is a saving only if compared with previous proposals. There is a real increase of no less than £244 million a year by 1979–80. If that is doubted, I refer the House to page 133 of the Public Expenditure Survey. That figure is stated to be at 1975 prices. God knows what the increase will be when one takes into account inflation. It will be enough to give the Chancellor of the Exchequer pneumonia.
On another page of the survey the increase is shown only as £3 million but, knowing the Defence Ministry, we can safely assume that it really means the higher figure of spending. I suspect that the high figure is nearer the truth. This year's arms spending reaches an all-time record and is due to soar far higher still. Labour's election commitment is to reduce the share of gross national product devoted to arms to that of our major NATO Allies. According to Dr. Frank Blackaby, Director of the National Institute for Economic and Social Research, one of the most eminent statisticians in the country, within five years this would save us no less than £1·4 billion a year—that is to say, if we cut our share of gross national product down to their share.
What could we not do with that annual saving? We could build nearly all the houses, nursery schools and hospitals we urgently need. Without such savings it is hypocrisy for us to talk about "war on want". One Conservative Member of Parliament has argued the case for ignoring GNP comparisons, but that is the method of comparison recognised by NATO. It is true that West Germany spends more on arms than we do. That is naturally the case because West Germany is a wealthier country. It seems ridiculous to me, and to many of my

hon. Friends, that a poorer country such as ours should pay a higher percentage on defence than a wealthier country pays. We spend nearly one-and-a-half times the proportion paid by other countries.
As an excuse for this increase in spending, Conservative Members of Parliament and newspapers regale us with horror stories involving the Red Army sweeping across Europe. We can almost see the Soviet fleet sailing up the Thames or the Manchester Ship Canal.

Mr. Iain MacCormick: In parts of Scotland one can just about see the Soviet fleet. Part of that fleet is in the area surveying the activities of our own Navy.

Mr. Allaun: That is certainly true. But I hardly think that the NATO navy is unobservable to the Soviet people.
A recent article by Lord Chalfont in The Times is illustrated with a diagram showing 10 broad arrows sweeping from East to West showing us just where, and how many, divisions will invade us. This is intended to whip up fear of another country and thereby to get us to increase our arms spending. I expect that in the Kremlin there are similar maps showing with broad arrows where the NATO forces will invade Eastern Europe.
The best comment on this matter has been made by that distinguished American professor, John Kenneth Galbraith, who said:
Each winter as the Pentagon budget comes under Congressional inspection, it has long been noticed in the United States that the Soviet Union has a sudden, seasonal and extensive accession of military strength. It also, in those pre-appropriation months, become dramatically more belligerent—today the Elbe, tomorrow Nantucket. Perhaps only as a manifestation of a spiritual affinity between the English speaking peoples, this cyclical tendency of the Soviet menace seems now to have spread to Britain. The thought crosses my mind that the practical inspiration may be the same.
That is a very acute observation by Professor Galbraith. We have been conned in this way before. Hon. Members will remember the so-called "missile gap" some years ago which showed the inferiority of American missiles to the Soviet Union. This was used to justify a colossal expenditure on new weapons. Later it transpired that there never was a missile gap and that all the time the United States missile forces were greater than those of the Russians.

Mr. Ian Gilmour: The hon. Gentleman can hardly cite Professor Galbraith and the missile gap, because the missile gap was promulgated by President Kennedy when he was a candidate, greatly supported by Professor Galbraith.

Mr. Allaun: Unlike some hon. Members, Professor Galbraith has learned from experience. He will not be conned a second time. Nevertheless, the Daily Telegraph, The Times, the Daily Express and other newspapers, and also the BBC, go on daily trying to chill our blood with their accounts of enormous Soviet armed forces, particularly naval.
I regret these forces more than the Conservatives do, but the Conservatives, and some hon. Members on this side of the House, overlook the even greater NATO forces. According to the present United States Secretary of State for Defence, NATO has superiority over the Warsaw Pact in naval and nuclear power. The militarists play down the news that the American Government's arms budget soared to $100 billion this year. The Opposition defence spokesman reminds me of the man who boasted about his brilliant eyesight. He got a friend to put a 2p piece in a tree 40 yards away and said "The date on that coin is 1967". As he walked forward to prove his point he tripped over a cow. The militarists are well aware of the Russian penny, but are blind to the American cow.
Both sides are at this game. Do not let it be thought that it is only one bloc. All this war propaganda is based on the assumption that the Soviet Union wants to invade the West. They are the "baddies", we are the "goodies".
The truth is that neither the American nor the Russian Government want a war, but they are so frightened of each other that they are preparing for one. That is how the arms race accelerates—an arms race which, by accident or design, could lead to the deaths of our children and our grandchildren and to the decimation of mankind.
The huge amounts we devote to military research and expenditure in this country are particularly damaging. Two out of every three qualified scientists and engineers in mechanical engineering in this country are working on weaponry.

yet military output accounts for less than 20 per cent. of our total output.
No wonder we are falling behind Japan, which spends less than 1 per cent. of its GNP on arms and does not export any arms at all. Britain devotes the highest proportion of GNP to military research and development and the lowest proportion to civil research and development. Is it surprising that we are falling behind in the industrial world?
Our shipbuilding is in a real mess, yet expenditure on naval research and development is 10 times as high as expenditure on research and development for merchant ships. Resources devoted to manufacturing investment yield 72 times as much in exports as do resources spent on defence.
The Secretary of State denies we are increasing the arms bill and urges us to look at the number of jobs that would be lost by reducing defence expenditure, but this is untrue. The Select Committee on expenditure reveals that far from cutting the number of jobs by 5,000, as forecast by the Ministry, last year's defence review actually increased the number employed by the Ministry by 7,000. If the Secretary of State says that cuts are being made in certain sections of his Ministry, why is the total bill, at 1975 prices, rising? The answer is that arms expenditure must be going up in other sections of the programme.
It has not been denied that £400 million is being spent on updating our nuclear weapons, or that another British underground test explosion may be held in America this year. Perhaps this is for the Polaris missile or use by the multi-role combat aircraft. But in either case, the difference between a new generation of nuclear weapons, which we forsook in our election manifesto last year, and the updating of our nuclear weapons is largely a matter of semantics—word play and little else.
I regret that the Secretary of State should misquote Labour policy on nuclear arms. Several times he has told the House that our manifesto said that we could ask for the removal of United States Polaris bases only after successful multilateral disarmament had been reached. In fact, our manifesto of March 1974 said:
We shall participate in the multilateral disarmament negotiations and as a first step


will seek the removal of American Polaris bases from Great Britain.

Mr. Mason: There was a later manifesto than that referred to by my hon. Friend. In our manifesto before the October election we said:
Starting from the basis of the multilateral disarmament negotiations, we will seek the removal of American Polaris bases from Britain.
The manifesto goes on:
We have renounced any intention of moving towards a new generation of strategic nuclear weapons.
As I have told my hon. Friend and other hon. Friends before until, as I said in our last debate, I am red in the face, that happens to be a fact and we stand by it.

Mr. Allaun: I am delighted to hear that, but why then is £400 million being spent on nuclear updating?
The really serious objection to arms reduction is that it may cause unemployment. The supporters of the amendment are more concerned about unemployment than the war hawks opposite who have never had a taste of it. Some of us have—back in the 1930s. But we can cut arms without causing unemployment. This has been shown in two high-powered surveys—one by the United Nations and the other by the Economist Intelligence Unit. This is not merely a matter of theory, but of practice.
The proof of the pudding was in 1945. There were 9 million men and women in the Armed Forces and war factories and within a year, under a Labour Government, they were re-employed in peaceful industry without unemployment. What we are seeking today is a far smaller switch, not from a war economy to a peace economy, but from a big arms programme to a smaller one.
Dr. Blackaby points out that between 1953 and 1957 a Conservative Government cut arms spending by £1,150 million a year, at 1974 prices, which is even greater than the £1,000 million a year cut urged by the Labour Party annual conference, and in those years unemployment actually fell from 1·5 per cent. to 1·4 per cent. of the population.
Dr. Blackaby estimates that saving £1 billion a year on arms, spread over five years, will affect 60,000 jobs a year. He contrasts this with the 4 million workers

who change jobs annually. It does not mean 60,000 dismissals a year. Most of the changes would be covered by retirement or voluntary exchanges of work. Alternative jobs can be found if the Government have the will, and this is just where the National Enterprise Board could be most usefully employed.
The joint shop stewards committee of Lucas Aerospace Companies, the stewards of Hawker-Siddeley, Vickers and Rolls-Royce have already considered alternative jobs on which their skills could be employed. This afternoon a deputation sent in a green card for me from the Hawker-Siddeley factory in Hertfordshire because the HS 146, a civilian plane, has been put on ice and 500 men and women are being declared redundant this weekend.
The men employed in the industry from top to bottom have thought of and gone into detail about the alternative work which they could do. These jobs include short take-off civil aircraft, battery-driven cars, lorries and buses, the harnessing of tidal energy, the jet propulsion of ships, machinery for the oil industry, and highly sophisticated medical machines not confined to kidney machines. Those men have listed 150 possible alternative jobs.
The arms industry is capital intensive. £1 million invested in peaceful industry will create more employment than if it is invested in war work. American statisticians have shown that for every $1 billion voted for the Department of Defence there are 10,600 fewer jobs available.
For all the derision of the Helsinki Agreement displayed in Conservative circles, some positive results have been forthcoming. One of these is the advance notice given by NATO and Warsaw Pact forces of military manoeuvres. That might help to stop what I believe is the greatest danger facing mankind, which is war by accident.
In conclusion I am glad to know that the opponents of the arms race in the House—I have been here 21 years—once a bare handful, now number over 100.

6.2 p.m.

Mr. Julian Amery: In a moment I shall turn to some of the industrial consequences of the issues we are debating but, in the interests of brevity, I hope that the hon. Member for


Salford, East (Mr. Allaun), will forgive me if I turn at once to the Secretary of State's speech and the White Paper we are discussing.
I could hardly believe my eyes when I read the White Paper—which I did carefully—and I could hardly believe my ears as I listened to the Secretary of State this afternoon. Here we are, discussing the great issues of defence on the last day of March. There was one word that was never spoken and one word never written in the White Paper—I hope that my right hon. Friend the Member for Chesham and Amersham (Mr. Gilmour) will forgive me when I say that he mentioned it only once—and that was "Angola".
What has happened in Angola has changed the whole dimension of the strategic problem that confronts the West. By any standard, from a military point of view it was a remarkable operation. Thousands of tons of military material, including tanks and aircraft, were lifted by sea and by air from the Soviet Union to the southern Atlantic seaboard of Africa and married up with 12,000 to 15,000 Cuban soldiers and between 400 and 500 Soviet military instructors. Those men and materials proceeded across lines of communication of enormous length and great vulnerability; and this at a time when the Soviet High Command could not even be sure that the reception area to which they were going was under its control. At the time when the most massive part of the build-up took place, the MPLA had only Luanda and two airfields in its hands.
Whatever we may think of the political rights or wrongs of what the Soviets have done with their Cuban satellites, this is a military operation which must command our respect and admiration.
We have been accustomed to seeing the Soviets send military material to Vietnam in time of war between North Vietnam and the Americans. We have been accustomed to seeing them send military material to the Middle East both in peace time and when there was war between Israel and the Arab States. But to conduct military operations in the southern hemisphere across the Atlantic and to send troops from a base in the Caribbean

introduces a totally new dimension into the world strategic problem.

Mr. Frank Allaun: Mr. Frank Allaun rose—

Mr. Amery: If the hon. Gentleman wishes to question what I have said, I shall of course give way, but I am sure that he will agree that what I have said so far is not controversial but simply a statement of fact.

Mr. Frank Allaun: The right hon. Gentleman will know that my hon. Friend the Member for Aberdeen, North (Mr. Hughes) has just come back from Angola. He assures me—he is an honourable man—that the Cuban forces did not come to Angola until it had been invaded by the armed forces of South Africa.

Mr. Nicholas Winterton: Nonsense.

Mr. Amery: I am sorry that I gave way, because I am not trying to score a political point or to say whether the Soviets were right or wrong. This is essentially a defence debate. We have just witnessed a remarkable military operation carried out by a State which we regard, by and large, as an adversary State—an operation carried out with the help of one of its allies, namely Cuba, over immense distances and involving a considerable quantity of men and materials. All I am arguing is that this brings a new dimension into the strategic concept that the Western world has to face. What has happened is outside the NATO framework in which all of us have worked most of the time. It is quite outside the old SEATO network and the Five-Power network. There is no Western Alliance organisation that covers that part of the world.
What has happened puts into question the basic concept of the White Paper. Eminent men, such as General Steinhoff from Germany, a prominent Belgian general, General Walker, Lord Chalfont and others have questioned the validity of NATO defence in Europe. The White Paper is confident that NATO is strong enough. The right hon. Gentleman re-interated his confidence in it today and I am inclined to agree with him. I hope he is right, but if he is right, Angola raises a major question on which I would have expected him to comment. If he is right, and if the Soviets cannot advance in


Europe, what is this Angolan adventure about? Is it just an incident, or is it the first step in a grand design? It is no use locking the front door if we leave the back door open for what President Kaunda referred to as the ravening tiger and its deadly cubs.
What was the Soviet's purpose in going into Angola? Majority rule, in the sense of black rule, was already an accepted fact. There was no longer a colonial issue. Why did the Soviet Union make such a great effort? It must have been a tremendous effort to get the men and the material there, and they ran a great risk. The Foreign Secretary and the Prime Minister talk with Mr. Gromyko, and I am sure that the Defence Secretary is privy to those talks. Have we any assurance that the Cubans and their Russian instructors are likely to be withdrawn? Is it at all likely that they will be withdrawn while the forces of UNITA are still quite strong in the field, and—I am interested to see—still drawing moral support from Zambia?
When we look at what is happening in Angola, when we see the influx of modern war material and of Soviet instructors into Mozambique, when we hear Mr. Brezhnev say, with all the authority of his position, that detente in Europe in no way inihibits the Soviet Union from supporting liberation movements elsewhere, when we read President Castro's speeches, and the very interesting interview given by Mr. Machel to one of the Sunday papers, are we not bound to ask ourselves whether it is the Soviet purpose to take over Central and Southern Africa by cajoling or compelling the moderate African leaders to join their camp, and by overthrowing the European leaders?
I do not assert that that is their intention; I am only proceeding on the old legal maxim that a man is believed to intend the logical consequences of what he does. When we see what is happening in Angola and in Mozambique, and when we read the speeches of Mr. Brezhnev—and it is very foolish not to believe what people say, recalling that we were blind or deaf to what Hitler said before the war—can we really say that there is no risk that this is the Soviet aim? And if it is, let us just look at what is at stake.
On several previous occasions in the House, when talking about Southern Africa, I have declared a personal interest. I do so again today, not because I think that that interest in any way influences the judgment that I am bringing to bear but because it has helped me to elucidate some of the facts about what is at stake. We all know that our trade with Southern Africa is very nearly as large as our trade with the whole of the rest of Africa. Our investments there are enormous. It is very difficult to compute their value. Whether, with the increase in the value of the Nigerian oil investment, they are greater or smaller, is a matter for argument, but they must be worth somewhere between £2,000 million and £5,000 million.
But what matters much more are the raw materials that we draw from Zaire, from Zambia, from Rhodesia and from South Africa. Fifty per cent. of the copper we get in Europe comes from Zaire and Zambia. Fifty per cent, of the chrome of the whole free world comes from Rhodesia and South Africa. Seventy-five per cent. of the cobalt of the whole free world comes from Central and Southern Africa. Seventy-five per cent. of the platinum of the whole free world comes from Central and Southern Africa. Thirty-three per cent. of the uranium of the free world comes from South-West Africa and South Africa. Sixty-five per cent. of the free world's gold, 85 per cent. of the diamonds—industrial as well as gem—50 per cent. of the vanadium—essential to the hardening of steel—and 30 per cent. of the manganese also come from this area. In addition, there are vast reserves—the largest in the world—of iron and coal. There is no oil, it is true, but the tankers from the Gulf come round the Cape.
That is the situation today, but, in Brussels, the European Economic Commission has made a study of the requirements for the future. It estimates that the industries of Europe alone—leaving out the United States of America—will require an investment of between $50 billion and $60 billion between 1976 and 1995 if we are to get the minerals that our metal-using industries will require. At least half that investment will have to go into Africa.
If we consider what would happen if this source of raw material were to be cut off, we see at once that the result could be catastrophic. There could be a dislocation which would diminish the supply. There could be an embargo, such as we had momentarily in the Middle East over oil. Or there could be a Soviet monopoly of these materials, in which case the Soviet Union could dictate to us the economic terms and, indeed, the political terms on which we received them.
The effect on the metal-using industries of this country would be of immense importance. It is very difficult to calculate the importance of this sort of hypothetical or potential development, but we have a standard, as it happens, by which we can measure it. We have been through this sort of thing since the end of 1973, over oil. In this House we all know perfectly well that the main cause of the recession through which we are going is not the mistakes that are sometimes imputed to the last Conservative Government, or even, with greater worth, to the present Government. It is the increase in the price of oil. This has hit the entire industrial world and cut the ground from under all our customers in the Third World.
It used to be said that the Arabs cannot drink the oil. Yes, but they have been able to raise the price to a point which has created a major slump here. That slump has produced unemployment. That unemployment has produced lower living standards. Those lower living standards have produced social tensions. Those tensions, among other things, have boosted the stock of the Communist Party in Italy and France.
If we were to add, to what we have already gone through with the increase in the price of oil, even as little as a similar dislocation and price increase in the supply of Central and Southern African metals, what would it mean—another million on the dole? It would not be much less.
Defence is not only about the protection of this island; it is about the protection of our vital interests. These interests are not yet attacked directly, except in as much as we had a limited interest in Angola. But they are directly and immediately threatened by the presence of 15,000 Cuban troops and 600 or 400

Soviet advisers in Angola; by what has been said by Mr. Brezhnev; and by what is going on in Mozambique. Yet on this subject the White Paper is silent, and the Secretary of State is silent. I think this is wrong.
I agree that there is a little movement going on in the stratosphere of the West. Dr. Kissinger has tried to speak to the Soviet Union, but rather in the words of King Lear:
I will do such things—what they are yet I know not—but they shall be the terrors of the earth.
If the Cubans try to do it again, Dr. Kissinger has not told us what he will do.
The Prime Minister—speaking from where the right hon. Gentleman is sitting—told us that he had made it very clear to Mr. Gromyko that any further operations by the Cubans or the Soviets beyond Angola would be very reprehensible and would not be acceptable. To my mind, he did not go far enough. I should have liked him to say he wanted them to go bag and baggage out of Angola. But all this is words, and the right hon. Gentleman knows as well as I do that diplomacy must be backed by power, economic or military, if it is to be effective. Now, since the threat, whether in terms of war material, Cuban volunteers, or Soviet instructors, is military, it will be very difficult to meet it unless we are prepared to make a military as well as an economic response.
Where will the next blow fall? It seems to me that Zambia is in the front line. It would be quite wrong to interpret President Kaunda's proposal yesterday as either naïve or foolish. He knew perfectly well that we could not respond to his proposal. He was putting out a distress signal to the West. He was saying "Unless you come in and do something I shall either be swept away or compelled to join the extremist camp." Of course, we cannot do what he asks. The question is whether we can help him in other ways, either by buying at the pithead the copper that he cannot move, or providing him with more military material and instructors. Can we help him to keep out of the contest and confrontation that the Soviets are seeking to mobilise? Zaire is in much the same camp. We cannot take all this on upon ourselves, but we might with our European allies.
Rhodesia may be the next in line. I can hardly believe that we really think it is in our interests to pay Mr. Machel to take over Rhodesia on behalf of Soviet imperialism, whatever any of us may think of Mr. Smith. Raw material is pouring into Mozambique. Is it really sensible to continue the arms embargo against South Africa?
Of course, we in Britain cannot take on this whole issue alone. The right hon. Gentleman has said so often that we cannot be the policemen of the world any more. He is right about that, and no one on this side of the House including my right hon. Friend the Leader of the Opposition has ever dissented from that proposition. But a special responsibility rests on Britain towards Central and Southern Africa. It arises from the enormous interests that we have there and from our very long historical association with those countries and our experience of them.
It is the duty of this House and of this Government to sound the tocsin, to ring the alarm wherever we can about what is going on; at the United Nations, where the Chinese have not been behindhand in reproving the Russians and the Cubans for what they have been doing; at the European Summit tomorrow; and with the President of the United States. I find it difficult to believe that when we were last in power a situation of this kind would not have resulted almost automatically in a visit of the Prime Minister of the day to see the leaders of Europe and the President of the United States.
But, also, there is a lot of homework to be done in Whitehall. What kind of effort needs to be made to check Soviet imperialism, collectively by the West—by NATO and by Europe? If we can assess the effort that is required, what contribution could we make to it? What could we supply by way of ground, air and naval forces?
What are the logistical implications? It may mean some co-operation with South Africa. We must not let our opinions of South Africa blind us or inhibit us to the very much greater British interests that are at stake. Winston Churchill never allowed his views about Marshal Stalin or General Metaxas to

blind him from coming to their immediate support when they needed it.

Mr. Fernyhough: I do not know whether the right hon. Gentleman was here a fortnight ago when his right hon. Friend the Member for Sidcup (Mr. Heath) in the public expenditure debate made a speech in which he referred to Africa and said quite pointedly that British interests were much more in tune with Black Africa, to which we must give greater thought than White Africa.

Mr. Amery: I thought that I was talking about Zambia and Zaire—

Mr. Fernyhough: No, South Africa.

Mr. Amery: That was at a later stage. Unlike the right hon. Member for Jarrow (Mr. Fernyhough), I do not see this picture in terms of colour. I see it much more in terms of the threat of Soviet imperialism to the moderate Governments in Zambia and Zaire and to the European-led Governments in Rhodesia and South Africa. I am interested and concerned not because of any particular affection for any of those Governments, black or white. The two African Governments are single-party Governments with no majority rule in the sense that we understand it. The two European-led Governments do not have majority rule in the sense that we understand it.
I am interested and concerned because of the extent of British interests out there and because of the dependence of British industry, European industry and British jobs on our having access to those raw materials and to that trade and the return on the investments involved.
Are the staffs in Whitehall looking at the local balance of power? Are they trying to see how the allies of the Soviet thrust in Mozambique and Angola and the guerrillas on their side compare in strength with the forces which could be mustered against them? How do lines of communication affect the issue? Their lines seem to be stretched very much longer than ours, but I may be wrong. At any rate, I seek assurances that the Government recognise the threat to British, European and Western interests as a whole that is posed by what has happened in Angola.
I should like an assurance that we are considering, with our own military advisers here in Whitehall, what should be done about it collectively and what


contribution we could make towards it. I should like assurances that we are having discussions or will be discussing with our European partners and American allies not only the diplomatic steps which should be taken but, if necessary, the military steps to back them up.
Nothing else is at stake than the survival of the industrial economy of the West.

6.25 p.m.

Mr. J. P. W. Mallalieu: The right hon. Member for Brighton, Pavilion (Mr. Amery) seemed to be building up a rather powerful case on the basis of a hypothesis in which he did not believe. The hypothesis was that the Soviets were planning to take over Southern and Central Africa, and the right hon. Gentleman said specifically, as I understood him, that he did not believe that that was the case.

Mr. Amery: I am sorry. I said the opposite. I pointed out that many distinguished men had said that there was a real danger that the NATO strategy in Europe could not hold the front. I went on to say that I thought that the Secretary of State was probably right in saying that NATO could hold the front in Europe, that I was inclined to agree with him there and did not expect a Soviet attack in Europe. I went on to suggest that it was possible that the Russians were pursuing an indirect challenge and going for the underbelly of the West. That was the threat that I tried to put before the House. I said that I did not think that there would be an attack in Europe. I said that there was a threat in the South.

Mr. Mallalieu: I got the first part quite clearly. It was the second part that I misunderstood. When the right hon. Gentleman came to the second part, I thought that he put the hypothesis of an indirect attack and then said that he did not believe it. Obviously I misunderstood him, and I apologise.
However, the right hon. Gentleman shied away from what would seem to be the solution if his hypothesis was correct, namely, that there was so serious a Soviet threat to Central and Southern Africa that we had to try to resume, in part, our world-wide role, which we cannot possibly do. I think that he said that

was not possible. He suggested that we should have consultations with our Allies, that we should make a song and dance about it in the United Nations, and so forth. To that, I take no exception, and I shall be very interested to hear what my right hon. and hon. Friends have to make of the right hon. Gentleman's general observations on the subject.
I turn to the speech of the right hon. Member for Chesham and Amersham (Mr. Gilmour). I thought that on a serious subject he made a surprisingly flippant speech. However, I agree with him about two matters. One is this GNP business, to which I shall return in a moment. The other is in respect of what he said about Sir Michael Cary.
It is probable that I have had longer professional associations with Sir Michael Cary than anyone else in the House. It so happens that, 31 years ago, when I was the PPS to John Strachey at the Air Ministry, he came into the Private Office as head of it, and I worked with him for more than a year. Subsequently, when I became a Minister and went to the Admiralty, he was the senior civil servant there. I knew him well, for a long time. He was a great civil servant, and his premature death was a real tragedy.
My right hon. Friend the Secretary of State has had very few congratulations from either side of the House, and I want to remedy that to some extent.
I am delighted that our commitments overseas have been reduced in Mauritius, Singapore and elsewhere, including Hong Kong, but I note that in Hong Kong there are still four infantry battalions. I want to know what they are supposed to be doing there. If they are being used for police purposes, the whole cost should surely fall on the colony. It is a very wealthy colony, and it can afford to pay for them. If, on the other hand, these forces are being kept there to stop the Chinese hordes from bursting through the New Territories into Hong Kong itself, quite seriously we ought to bring them home as soon as possible and put them to practical and safer activities, perhaps in Northern Ireland.
I am glad to see that the White Paper has added some information not only about our forces but about NATO forces. It is now essential that we should try to consider our forces in the context of our alliances, so that we can see better


whether our capabilities match up to whatever threat we may face.
On one thing the information in the White Paper is extremely deficient—the defence of North Sea oil. That is a prime British interest. It can be under threat from the air or the sea, from beneath the sea, or from the land. The threat can come from full-scale war or from guerrilla activities by the IRA, the Palestine Liberation Front or even from our home-grown "nutters" like the Tartan Army.
Conventional forces and conventional defences are not going to be enough against guerrilla attacks. For one thing, counter-intelligence comes into that to an exceptional degree. Further, I do not think the defence of this prime British interest is helped in any way by what I would call the dissipation of responsibility. I understand that no fewer than five separate Government Departments have a say in the safety of this great British interest. The protection of the pipelines and installations ashore, and of the pipelines and rigs at sea, should be entrusted to a specially created command. That command should contain elements of air-sea rescue, and even anti-pollution services, and it should certainly have a strong counterintelligence unit. But it should in fact be based on the Royal Navy and the Royal Marines, with the whole of it under a single command and with direct responsibility to one Minister—the Secretary of State for Defence.
I come to a major doubt that I have about the White Paper proposals. It calls for a slow and limited growth in equipment spending, which we nevertheless expect to take a somewhat higher proportion of the all-over defence budget. The White Paper goes on to say that it will be combined with a roughly stable research and development effort. We ought to note that of the total equipment spending—that is to say, spending on new production, spares, development and research—the amount spent on straight research amounts to only 5 per cent.
The most striking feature of modern defence preparations is the speed at which weaponry goes out of date. A piece of equipment or a whole system is no sooner in service than it is obsolete.

Therefore, I strongly believe that in periods of relative calm we ought to adopt the policy of leap-frogging. The procedure at the moment seems to be that when Mark I is actually in service, Mark II is virtually at the production stage, Mark III is getting nearer to prototype and research is proceeding on Mark IV. This is going to mean that we shall spend an enormous amount of money if, in comparatively calm periods, we attempt to put into service not only Mark I but also Marks II, III and IV.
I suggest that wherever it is at all practicable we should—I repeat—in calm periods, put Mark I into service and carry on with Mark II and indeed Mark III to the development stage and to the production stage where we can put enough of a particular kind of equipment into the hands of those who are to act as instructors. We should not put Marks II and III into service; we should wait until we reach the point where Mark IV is ready for service, and we should then put that into service leaving out the other two. This would mean that spending on the purchase of equipment over a period would be a good deal less. That, in its turn, would mean that some of the saving could go to greatly increase research, which I consider to be essential. While it would also mean that in certain periods the forces would be equipped with less than up-to-date weapons—and I am afraid that happens now—there would be the capacity rapidly to provide the very latest weapons if tension were seen to grow.
That brings me finally to the argument about percentages of the gross national product. I wish to goodness NATO would get out of the habit of using that yardstick, and that my right hon. Friend the Secretary of State and my hon. Friend the Member for Salford, East (Mr. Allaun) would do so also. It is an absolutely bogus yardstick, and so is expenditure per capita; because neither takes account of the need or the amount of threat. What kind of yardstick is there to measure the amount of threat? There simply is not one. The whole thing is guesswork in a very large way. It is guesswork about the extent and size of the immediate threat, about what the threat is to be in, say, 10 years' time. It is guesswork about the right size and type of force to oppose against that threat.


It is all guesswork and I am concerned that it should be done not by the military, who tend to over-insure, but just by the Foreign Office. Though they are godlike, they are not always omniscient. I do not want to leave it to the cooing doves who hover in the stratosphere far from the facts of life. I do not want it done by the bullfrogs croaking away in their "Red Menace" marshes.
The best for which we can hope, and what I hope, is that we shall have that guess made by Governments who listen to their advisers, whether they are military or diplomatic, and who weigh their advice against the needs of the economy and then make a judgment. Of course, that judgment, too, will be a guess, but at least it will be an informed guess. It is because I think we have got an informed guess in this White Paper that I support it.

6.40 p.m.

Mr. George Younger: I agreed with a great deal of what the hon. Member for Huddersfield, East (Mr. Mallalieu) said. I am afraid that I cannot join him in terms of the bouquet he handed out to his right hon. Friend the Secretary of State. Anyone who has been in this House for some time cannot fail to be impressed by the peculiar difficulty of the Secretary of State's task. He is in the position of many of the distinguished military commanders of history—he is fighting on too many fronts. Whereas he deals reasonably adequately with each of the threats he faces, from the Left, from the Opposition and from others who oppose his view, the various arguments simply do not hang together. That is why we are to have yet another debate on a White Paper which contains parts that all of us can accept but which, taken together, is so contradictory that it does not produce any coherent picture of the Government's policy or of how they will carry it out.
I cannot go along with the Secretary of State in many of the things he said today. I do not know how he can stand at the Dispatch Box and say that NATO does not think we have got our priorities wrong when it was so outspoken in its objection last year about what we were doing that they had to be printed in the White Paper. I do not know how the

right hon. Gentleman can describe "minor gestures" on the flanks as improvements, when they are set against the total removal of our support for the southern flank of NATO and massive reductions in our contribution to the northern flank. How he can maintain that there is no effect, quantitatively or qualitatively—those were his words—in our contribution to NATO as a result of the defence cuts beats me.
I suppose that once more we are in for a debate on the defence White Paper which is in itself contradictory—a debate in which, once more, the Opposition will win the arguments but not, I am afraid, the vote. Once more there will be points upon which everyone, apart from the Government, will agree. The main lines of criticism will be agreed upon by most, except for the Government. No doubt most of the military commanders and the civilian heads of NATO will subscribe to what will be said from the Conservative Benches. I have no doubt that the balance of comment in the media will be favourable to criticisms that are made of the White Paper. Equally, I have no doubt that everyone will bear in mind that the Chief of the Defence Staff has gone on record as saying that before these cuts were made our defences were already down to bedrock.
There are those military gentleman who are free to express their views openly because they are not so directly part of our own Government service—such people as Admiral Lewin and Admiral Hill-Norton, who have made their views pretty clear over the past year or two. There has been monumental criticism from the all-party Estimates Committee Sub-Committee, upon which some of my hon. Friends have served with such devotion. That Committee details whole lists of telling criticisms of the effects of the defence cuts on our forces.
My point is that we are doing this for the third time within a year. We simply cannot go on like this if we have any responsibility for the future defence of this country. Decisions taken on this matter span a much longer period than the life of one Government or, indeed, of two or three Governments added together. The responsibility of the Government Front Bench in defence matters is a massive one, which cannot be dictated by short-term party political considerations.


I was glad that the hon. Member for Huddersfield, East mentioned the gross national product argument. I do not intend to return to that today, because I agree with my right hon. Friend the Member for Chesham and Amersham (Mr. Gilmour) that the argument is, or ought to be, dead, in spite of the hon. Member for Salford, East (Mr. Allaun), who manfully struggles with it. I shall make one last point, which should give the coup de grace to the argument.
We have been told by the hon. Member for Salford, East again today that the gross national product method is still a valid way of assessing our contribution to defence. I remember pointing out that one of the objections to this was that if the gross national product goes up we do not require more defence, and if it goes down we do not require less. There is no relationship. The calculations that the Government made in their original White Paper last year presumed—a most extraordinary presumption—that the gross national product would grow by an average of 3 per cent. per annum over the period of the review. I remember that many of us at the time took leave to doubt whether that was a reasonable assumption.
It ought to be recorded that here we are, one year later, and the gross national product has not grown by 3 per cent. in this period. It has gone down, on my calculations, by 1·8 per cent. The Government should be re-working their calculations because of that, but we have not heard any mention of that. That is because they realise that it is sheer academic nonsense. It ought to be forgotten.
The White Paper once more spells out the threat against which our country and NATO have to provide. Once more it has to admit that the threat has not diminished but has become greater during the past year. Once more the White Paper comes to the breathtaking conclusion that therefore it is our duty to reduce our defences still further. The fact is, although the Secretary of State cannot admit it in debate, that these cuts are not made for defence reasons at all; they are made purely for financial reasons and it would be more straightforward to say so. Nor should we be deceived by the Secretary of State's ploy, which he tried a month or two ago—I imagine

it was him, but I may be doing him an injustice—of leaking a supposed defence cuts figure of £1,000 million per annum to the Press and other areas of public discussion, no doubt in the hope that when the figure turned out to be about £200 million everyone would think that a great victory had been won and we need not worry.
The original White Paper cut our defences to a dangerously low level. The cuts were multiplied yet further, before the ink was dry on the paper. These cuts go still further. They are all extremely unwise and dangerous. The Left wing has won once more in this year's defence White Paper and with the cuts that have been announced. The speech of the hon. Member for Salford, East made me wonder why the Secretary of State pays so much attention to the views of the Left Wing. The Left's amendment has 83 signatures attached to it. It surprised me to note that there were absolutely none of those people present to support the hon. Member for Salford, East. I do not know where they all were, but their enthusiasm for the subject does not seem to be as strong as it once was. Maybe they, as well as anyone, can spot a bad argument when they see it.
The hon. Member for Salford, East made great play about the danger of our being conned by the idea that the growing might of the Warsaw Pact was dangerous. He suggested that we ought not to regard it as dangerous. If I had interrupted him then I would have asked him whether he did not think that we were nearly conned in exactly the same way in the 1930s. Was it not an extremely lucky thing that our predecessors, at the end of the eleventh hour, were not conned quite badly enough for us to be taken in the worst position of all? The Left Wing wishes only to get its hands on as much money as possible from the defence budget. The hon. Member made that pretty clear today. No evidence that I can find suggests that when defence spending is cut the money somehow miraculously goes to other good causes.
The hon. Member for Salford, East seems to believe that defence cuts help to create jobs. Today he produced the strange theory that when people are put out of work from defence projects they do not become unemployed, because they


are too old, they retire, or they find other jobs. But he does not seem to think that others who are out of work find it so easy to obtain new jobs. It is a case of the wish being father to the thought.
The hon. Member is not being logical. From personal experience I know that defence cuts do result in the loss of jobs. In my constituency, a small but important factory—Scottish Aviation Limited—has had its future prospects decimated by defence cuts which are making its products no longer necessary. My constituents know that this is the case, and so does everyone else in the aircraft industry. The same is happening with Hawker Siddeley, the British Aircraft Corporation and many other firms involved in the defence industry. Over the last year or two there has been a steady procession to the House of people who work in these industries, wanting to tell us about the situation. Those people are very concerned.
I turn now to the effect of the cuts upon our forces. They have had effects in two important areas. I know that the Secretary of State would like to believe that they have no effect on NATO, but that simply is not true. NATO has had a rather bad year. It has suffered a series of reverses on the political side. A number of its members, including ourselves, have been cutting back on defence expenditure, and the political will of the Alliance is in a more uncertain state than it has been for a long time. That has been demonstrated to us in the past year or two.
It is false to suggest that the threat to NATO is purely on the central front. It is arguable that the threat, contained as it is by the determination of the NATO forces on the central front, merely extends the possibility of the most likely areas of threat being on the flanks. If confirmation of that is needed the Select Committee on page 19, paragraph 20, of its Report, makes clear that it is a question of the ability of the maritime forces of NATO to respond quickly to new threats once cuts made by ourselves and other nations have had their effect.
The cuts are guilty of greatly impairing our mobility within NATO. My hon.

Friend the Member for Macclesfield (Mr. Winterton) raised the question of reports in the Press that Royal Marine Commandos will have to travel by British Rail ferry to operations in Norway. I hope that British Rail will be rather more on time for them than it is for the rest of us. The Minister should carefully consider not just the practicality of such a mode of transport but what sort of impression of the British Armed Forces it will create if they arrive by Sealink Ferry flying the British Rail flag. What arrangements are being made for such eventualities? Are the crews of these ferries to be temporarily enrolled in the Royal Naval Reserve? If there is any danger in the operation at a time of tension, are they obliged to travel there if they do not wish to? Have any arrangements been made to consult the unions and British Rail? I doubt it.
The same applies to our air mobility, of which NATO officers and officials have been critical. In spite of many requests, we have never had an answer to the question of what arrangements there are for calling in civilian aircraft if there is an emergency with which the Regular Forces cannot cope. Under what obligation is a civilian British Airways pilot if he is asked, in a state of emergency, to fly to an airfield that is under fire? Are he and his family covered by insurance, and what arrangements for pensions and compensation are there for British Airways staff and that of other contractors who might be involved? We are entitled to know if there are water tight arrangements that will work without difficulty, trouble or discussions, should a crisis arise. There will be no time for discussion once the balloon goes up.
There is the unanswered question of the change of the organisation of British Army units, particularly in BAOR, and the abolition of the brigade. Everyone to whom I have spoken appears to think that the exercise held last autumn proved that the new arrangements do not work. I understand that the wireless communications involved proved to be too short in range for the distances involved. There is no doubt that these changes have made our Allies mystified and concerned at the effect on the overall command of the Alliance, because one major part of the Alliance's forces operates a different system of command from the rest.
The Government must come clean about the difficulty that we experienced on last year's exercises and tell us how they are to be rectified—if they can be. They must satisfy the House that the system can be worked. I hope that the Government will take into account the views of our Allies if they feel that to have our forces on a different basis to theirs is a major disadvantage to NATO in time of crisis. I hope that the Government will not be too proud to think again.
The defence cuts will have effects on our home-based forces. There is no doubt that the stresses and strains of the economies and cuts of the last few years have really eaten into the standard of training of our forces. Morale is still high, and those on the ground do a good job, but every officer makes it clear that he would like training to be better and more up to date. That is particularly true of large formation training, which has been done very little indeed over the past few years. It is important for the Government to ensure that such training is done once more, because an army that has not experienced large formation training is almost bound to be in a shambles in the early days of a new crisis.
Shortages of supplies, including spares, petrol and ammunition are drastically reducing training, particularly training with vehicles, and it affects the morale and competence of the troops. The troops feel that they are not getting enough training in their vehicles because of the economies.
There is a sinister development. Cuts are said to be mainly concentrated on equipment and clothing, but from experience I know that this sort of equipment is always behindhand, anyway. Further stockpiling cuts will have an effect on morale before long. I hope that no one is reducing stockpiles of oil or oil-related products. Nothing could be more foolish in the present strategic situation.
In spite of what the Secretary of State says, there is no doubt in the minds of most other people that our NATO contribution has been seriously weakened by the cuts in the past year. There is no doubt that the further cuts will weaken the back-up to the forces we produce, and weaken their effectiveness. There is no doubt that the policy of frequent cuts

makes it more difficult for us to exercise, within Europe, the leadership that we need to exercise and that our Allies would very much welcome. There is no doubt that our standards of training are slipping.
I could find no mention in the White Paper of that vital factor in every defence system and in all defence planning—allowance for the unforeseen. The one thing that is certain is that the unforeseen will occur. The style and type of a future crisis will be quite different from anything that we have had before. The commitments that our reduced forces are now undertaking leave no room for the unexpected. Half of our TAVR is needed to bring our Regular Forces up to strength. The matter is one that the Government will ignore at their peril.
There is one good sign this year in what is rather a catalogue of woe. Public opinion has at last begun to wake up to the ill effects of repeated cuts in our defence. I hope that it has not woken up too late. I believe that it has not, and that there is still time to make good the shortfall that the cuts have produced.
We should not forget that the Secretary of State said this afternoon that a policy of strength and deterrence had stood the NATO Alliance in good stead and given us 31 years of peace. If only the Government will realise that their cuts are damaging that situation, and will put it to rights, I believe that we can with confidence look forward to another 30 and many more years of peace.

7.2 p.m.

Mr. Tam Dalyell: Many of my Scottish colleagues and I spent the weekend at Troon. Like many of them, at the invitation of Gavin Laird of the AEF, I talked to the delegation of workers from Scottish Aviation that the hon. Member for Ayr (Mr. Younger) mentioned. In the opinion of many of us, Labour Scottish MPs, there is a real problem there. I hope that my hon. Friend the Under-Secretary of State for Defence for the Royal Air Force and my right hon. Friend the Minister of State for Defence will do what they can about it.
As a recently-sponsored NUR Member, I take the gravest exception to what the hon. Gentleman said about the British Rail ferries! I repudiate his adverse


remarks about them. I have every confidence that—dare I say it?—my members will carry the soldiers quickly and on time to Northern Norway!
This is the 14th occasion on which I have taken part in a defence debate. I register broad support for what the Government are doing in their White Paper. These are rather different days from those when Lord Wigg in his heyday used to go into the details of Blue Streak. Perhaps we should still have that kind of scrutiny.
I appreciate what my right hon. Friend the Secretary of State has done as Chairman of Eurogroup. Those who are interested in defence in Strasbourg, Luxembourg and Brussels, where I seem to spend a good deal of my time these days, have a high regard for what my right hon. Friend did in his important position. I am told by those who are in a position to know that he can claim with some justice to have brought about a greater co-operation in European defence. Europeans hold him in high esteem.
Had this been an ordinary occasion for some of us, I might have addressed the House on the subjects of the southern flank of NATO, the military effects of Greek entry into the Common Market, and whether the Greeks will use membership as a lever in their relations with Turkey. But there is one other subject of more immediate importance and relevance to the House.
Before next year there may have been a General Election, and it could be that the Scottish National Party will have 36 or more Members here. In that event, it would be difficult in my opinion to deny them the right to enter into independence negotiations between Scotland and England, negotiations that would bring to an end the Act of Union as we know it.
We must focus our minds on what might have been seen, only some months ago, to be a laughing matter—the possibility of the break-up of the United Kingdom and of Scotland's becoming an independent country. An independent country means independent forces. When pressed, the SNP says that there will be a separate Scottish Army, Navy and Air Force. I see the hon. Member for Argyll (Mr. MacCormick) about to rise. I have

his election manifesto in my hand. On page 11 he makes the position quite clear, saying:
As an independent country Scotland wilt have its own diplomatic missions abroad, and Scots will travel with Scottish passports. Scotland will be represented at the United Nations and will be a member of the Commonwealth …
However, it is also necessary to make clear our determination to defend our homeland at all times. The Scottish National Party is in favour of the principles of collective defence and advocates mutual agreements with other states to maintain peace and security. Scotland will need forces to defend Scotland (and oil and gas installations in the Scottish sectors of the seas round our coasts) and to meet international commitments undertaken as part of collective defence arrangements for Western Europe, or as a member of the United Nations. The cost of such a policy would be similar to that incurred by other countries of comparable size in Europe.
In effect, that means forces as separate from those of the British Army as are those of Holland, France and so on.

Mr. MacCormick: It must be very disappointing for the hon. Gentleman to be making his speech before I have the good fortune to catch your eye, Mr. Deputy Speaker—if I do. The hon. Gentleman has begun to treat the House to a description of things that might happen. Does he accept that the Scottish National Party commitment on defence is total loyalty to membership of NATO?

Mr. Dalyell: This is all very woolly, but it is also revealing. My Dutch colleague, Mr. Schelto Patijn and Mr. Lees Laban, would say exactly the same. The hon. Gentleman has made rather a giveaway remark. It is something that would also be said by Belgians, French, West Germans, Italians and so on. It reveals that there would be an Army as separate from the English, Welsh or whatever Army. Here is the basic confusion. I am grateful for that intervention, because it underlines the seriousness of the case I put forward. It shows that I am not putting up an Aunty Sally but describing a real prospect. I thank the hon. Gentleman for confirming that I am not just making a cheap, slick, debating point. It is the reality of the situation.

Mr. William Hamilton: My hon. Friend knows as well as I do that Rosyth dockyard services the nuclear submarines, which are a part of the


NATO force. Does he know whether the SNP is in favour of retaining the nuclear force within NATO and keeping its servicing at Rosyth?

Mr. Dalyell: My hon. Friend hopes to catch your eye tomorrow, Mr. Deputy Speaker, and if he does so he will be able to go into more detail about dockyards. The matter is symptomatic of a wide series of problems involving not only Rosyth but the whole pattern of defence research, to which I propose to come later in my speech.
I have a very specific request to make to my hon. Friends on the Front Bench. Can the Ministry of Defence, within the next three or four months, produce some kind of paper—I do not think a White Paper is necessarily the best vehicle—setting out in detail the financial consequences and the costs of separate Scottish forces? If we are to have the breakup of the Services, let us be very clear and let the Scottish people, before they vote, be very clear, about precisely what is envisaged. I am asking my hon. Friends to use some of the expert manpower in the Ministry of Defence to bring forward a paper spelling out in detail what the cost would be in defence terms of breaking up the Services of the United Kingdom.
I would like to put it in practical and rather personal terms. For two years I was a tank crewman in what is now the Royal Scots Dragoon Guards—then the Royal Scots Greys. Hon. Gentlemen may say "Heaven help BAOR in the 1950s." Nevertheless, I was the only Scot in that tank crew. One other was a Geordie, there was one lad from Barns-ley—who was under the happy delusion that Barnsley was the up-and-coming football team in the English League—and there was a Londoner. The composition of the Royal Scots Dragoon Guards is not very different nowadays—one in three, or one in four, is a Scot.
I want to know precisely what are the consequences of such a unit being disbanded, on what basis and how they would be regrouped. Would a Scottish tank unit have access to the specialist facilities, which are necessary to any Army unit, at Bovington? This is the same issue raised by my hon. Friend from Fife, Central (Mr. Hamilton). Are the

common facilities, which we do not share with the Dutch, Belgians and French—perhaps we should—to be available to separate Scottish forces?
We then come to the Scottish infantry regiments. I see that the right hon. Member for Chesham and Amersham (Mr. Gilmour) is wearing a Brigade of Guards tie. What is to happen to the Scots Guards in all this? I repeat the delicious remark of Mr. Harold Macmillan, attributed to him when The Sunday Times was discussing the mechanics of "The Fall of Edward Heath." Mr. Macmillan said it was very unwise of any Government to take on the Vatican, the National Union of Mineworkers or the Brigade of Guards. Are the Scots Guards to be hived off?
This is a very real issue. The hon. Member for Ayr would be the first to say that perhaps I am not the best authority on the Argyll and Sutherland Highlanders. Nevertheless, what about the Scottish infantry regiments? A very high proportion of their soldiers are English and Welsh. Are they all to be disentangled?

Mr. MacCormick: Bearing in mind that it is not the policy of the SNP to disband any of the traditional Scottish regiments, would the hon. Gentleman not agree that it would be better if he bent his mind to the problem of how we shall continue that position if, as he believes, complete independence is inevitable?

Mr. Dalyell: This is just great. What is now suggested is that there should be a lot of English mercenaries in the Scottish regiments. Is that the proposal? It is fantastic. The hon. Gentleman says they do not want to disband the Scottish regiments. I must tell the hon. Gentleman that in my regiment two out of three men are English and Welsh. Yet what could be more Scottish than the Royal Scots Dragoon Guards? There are a lot of Englishmen in the Argyll and Sutherland Highlanders. So let us be very clear what we are talking about. We are talking about the disbanding of units. I will give way to the hon. Gentleman if he wants to come back to this. He does not?

Mr. MacCormick: This is the most disgraceful speech I have ever heard. Since we should be living in the closest


association, as we shall always do, with the rest of the British Isles, there is absolutely no reason why the difficulties he mentioned should occur. If he wants any proof of that, let him look at the numbers of people from the Republic of Ireland who at present serve in the British Armed Forces.

Mr. Dalyell: I had better not pursue that too far. It may be a disgraceful speech in the view of the SNP but if my speeches are disgraceful it is because they are brutally realistic in pointing out precisely what will happen. Let us just be a bit clear and cold about this. The Scottish electors, if they wish, may return 40 or more Scottish nationalist MPs. I am just concerned that before they do, they should be absolutely clear what the practical problems are, and do not buy pigs in pokes.
Let us get back to a few of the practical problems. What will happen to the REME? They have a number of specialist garrisons. There are a lot of Scots in the REME. How is this to be disentangled? What about the Corps of Signals? Are we to have a special Scottish Corps of Signals taken away somehow from Catterick? If so, I just want to know from the Army Minister precisely what the cost of all this will be. This is a very costly operation.
At the beginning of the Secretary of State's speech I interrupted him on the question of information and asked him—I thought he promised to do so: I shall have to check it in Hansard—whether he would give information because he said that this is a very costly business. The Scottish electors, preferably before the next election, have to know how costly this is to be. I suspect that, when they know all this and what it really means, many of those who used to vote for the Tory Party and now vote for the Scottish National Party are likely to start scratching their heads—certainly those in Argyll—when they know what is up.
What is to be done in a Scottish Army, even in NATO, about the training of officer cadets? Will my hon. Friends put this in an explanatory paper? We also come to the serious question of senior officers. Suppose there were a separate Scottish Army. Even in NATO,

presumably, senior officers and NCOs will have to opt one way or the other. My hon. Friend the Member for Both-well (Mr. Hamilton) was a distinguished sergeant-major. Which way would he opt? What about his pension rights? I am glad that my hon. Friend the Under-Secretary for the Navy is taking a note of this. I think we might have to have an explanatory document on forces' pension rights. All those retired soldiers living in Argyllshire will like to be clear on this.
Therefore we are getting into the whole question of the disentangling of the Services of the United Kingdom. This is what those who propose the break-up of Britain have to face. My right hon. Friend, in an aside earlier, said that he hoped that I would not use this debate at too great a length in order to peddle my own views, but these are far wider than my own views. This is the practicality of what the break-up of the United Kingdom means. I hope that hon. Gentlemen opposite, before they make up their minds, will study today's long leading article—the longest I have ever seen—in the Daily Telegraph and draw some conclusion from that.
We come to the question of the Scottish Navy. Here a different policy is involved. I hear that the hon. Member for Moray and Nairn (Mrs. Ewing) told all my European colleagues in the Assembly, "We would not be fighting Iceland. It is only the English who are doing that." I take that, at its logical conclusion, to mean that there would be an English and Scottish Navy.
This is particularly so when it comes to the defence of the oil rigs. I should like to know from the Under-Secretary of State for Defence for the Royal Navy, whose seminars I have enjoyed in the past on this matter and whose interest in it I commend, precisely what would be the cost to Scotland of defending the Brent, Auk and a number of other fields and to England of the English defending the Forties Field. The Forties, in international law, would go to England and not to Scotland—an awkward fact but a fact nevertheless. I should like some idea of the cost of defending the oil rigs.
In the interests of time, I leave to my hon. Friend the Member for Fife, Central the question of the dockyards, but


I hope that we shall have a full reply on that. This question relates not only to Rosyth but to the common facilities at Haslar and Pyestock. How would this be separated out, if there were to be separation? We should do much better to follow the argument of my hon. Friend the Member for Huddersfield, East (Mr. Mallalieu) and talk in terms of a United Kingdom environmental need.
Then there is the question of a Scottish Air Force. This would involve separate MRCA training, and I should like to know the cost. I believe that it costs £250,000 to train one MRCA pilot. This brings us back to economies of scale. Some of us who have gone to Munich to talk to Pancura and Gunnar Madelung know how difficult it is even for countries like Holland and Belgium to participate because their forces are not big enough. How can 5 million Scots have an effective stake in the MRCA without common training? On what basis would it be done? Then there is the question of the Nimrod squadron at Lossiemouth and the spares and training which that involves. Will there be a separate Scottish Nimrod unit?
This argument boils down to the preposterous. I see some hon. Members smiling. I would not have bothered the House of Commons with this matter even a year ago, but it is not so fanciful now, is it?
The practical question again arises when we consider the supposed move of Ministry of Defence civilians to Glasgow. If civilian numbers in the Ministry are to be cut by 40,000, I can imagine how the professional associations and trade unions would respond to any move to Glasgow, even in optimum times. But these are hardly optimum times. If I were a professional association or trade union leader in the current climate, and considering what is promised by the Scottish National Party, I would wonder whether there should be any move to Glasgow at all. I would see myself and my members returning in five years and having to buy houses in London again.
What is the attitude of the Ministry of Defence to this aspect of the move? This question interests a number of people in the centre of Scotland. If these difficulties exist, they should not be glossed over. They should be spelled out in all their stark detail. No stone should be

left unturned. It is no good saying that it is all very difficult. If the trouble is that there is serious worry in civilian circles in the Ministry of Defence over Scotland becoming independent, it is better to say so. Some of us are beginning to believe that that is the basic truth.
It is not only independence which raises these questions. We should also consider the projected Assembly. I would not have raised this matter unless there were a strong demand for an Assembly with economic powers. How will those powers be fitted in with the strategy of the Ministry of Defence? Along with many of my hon. Friends, I have constituency interests here. For example, will the North British Steel Foundry at Bathgate still get its Admiralty orders if the United Kingdom Government is not wholly responsible for the economic strategy of all these Islands?
I will throw away the rest of my notes. I could go on a long time on this matter. Those who lightly contemplate the breakup of the United Kingdom had better think out in all its starkness and discomfiture what the break-up of the Services and the procurement policy of the United Kingdom will mean to people.

7.25 p.m.

Mr. Geoffrey Rippon: The hon. Member for West Lothian (Mr. Dalyell) has made a novel contribution to our debate. I shall not enter into his argument, but I have no reason to challenge it. In his own way he has exposed the unreal world in which many people choose to live today, and he has done so in a most effective way.
Another group of people who live in an unreal world, I am afraid, are the hon. Member for Salford, East (Mr. Allaun) and those of his hon. Friends who support his point of view. They simply refuse to recognise that the peace and the freedom that we now enjoy depend entirely upon the maintenance of our external security.
The defence White Paper itself provides evidence of the growing military strength of the Soviet Union and the Warsaw Pact countries. It is incontrovertible that the evidence in the Government's own White Paper contradicts at every point the case for cutting our defence forces still further.
If I may say so with respect, my right hon. Friend the Member for Chesham


and Amersham (Mr. Gilmour) effectively revealed the implausibility—the word that he chose is undoubtedly justified—of the Government's whole case. We are entitled to put a very simple question to Ministers. If the Chief of the Defence Staff was right to say in July last year—we must press this again and again—that we were down to absolute bedrock, the Government must explain why the latest cuts, which the Secretary of State told his hon. Friend the Member for Salford, East were real, not spurious or "phoney", do not put us below the safety level. The onus is upon them to fulfil that responsibility to the House and the country.
No comfortable words from the Secretary of State can disguise the stark reality of the growing imbalance of forces not only on NATO's central front but elsewhere in the world. I shall follow up later some of the pertinent observations of my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) about the changing attitude that we must take to the strategy of our defence in the free world.
The only thing, perhaps upon which the Secretary of State may be congratulated is that he appears to some extent to have thwarted the efforts of the Chancellor of the Exchequer to cut our defences still further. The Chancellor has always wished to cut our defence to a dangerous level. It was a policy that he pursued consistently when he was himself Secretary of State for Defence, while he made his customary contradictory noises. He is a man who rides a bicycle in one direction, turns completely around, bicycles in the other direction, and says that he has not changed his approach. So we can congratulate the Secretary of State on having mustered sufficient support in the Cabinet to deal with the Chancellor, at least to some extent.
Even so, the right hon. Gentleman's speech, particularly that extraordinary long quotation of Treasury gobbledegook inserted in the middle, like the White Paper, reminded me of the old mnemonic:
Minus times minus equals plus:
The reason for this we need not discuss.
The only difference is that the Secretary of State's version implies that minus plus

minus equals plus. His explanation of the way in which the Government have three times cut defence in one year was implausible indeed, as my right hon. Friend said.
In our debate on 10th December, we discussed at some length the question of detente. More people now accept that detente remains an idea and not a fact. It will not become a fact until the Soviet tanks are beaten into ploughshares. It will never become a fact unless adequate defence potential, that is, a secure position from which to negotiate, is assured. Certainly, detente must remain an objective of our policy, but we must be realistic about it. The assurance of our ability to negotiate requires every member of the North Atlantic Alliance to make a full contribution to the NATO strategy.
That strategy of so-called flexible response now depends far too heavily upon the threat of nuclear war. If the Soviet forces could reach the Rhine in two days—and the Secretary of State did not deny that—the concept of a flexible response is not so very different from the old concept of the trip-wire. As the White Paper says in paragraph 32:
But the possession of nuclear weapons is not in itself sufficient to ensure deterrence. It must be made evident to a potential enemy that we would be prepared to use them if we had to.
The gravest danger now lies in the fact that without nuclear weapons there would be no balance left—and every reduction in our conventional forces lowers the nuclear threshold. That is a matter that all of us, however much we may know that we have to rely on the nuclear deterrent, must view with considerable concern.
It may be, as the White Paper suggests, that in Europe NATO remains our strength and our shield, albeit too dependent on nuclear weapons at an early stage in any conflict. But in a wider context the growth of Soviet military power at sea and in the air poses a more direct threat to the Alliance than does anything else. That is a subject upon which the White Paper and the Secretary of State today have been virtually silent.
Over the past decade or so Soviet military spending has increased by about 35 per cent. Much of that increase has been devoted to the expansion of global


power, threatening vital overseas areas and the sea routes upon which we depend for our essential supplies. Between 1964 and 1974 the Soviet Union produced 249 new major combat ships. During OKEAN 75, which was a Soviet naval exercise observed by NATO units last year, more than 200 nuclear submarines and surface ships and 400 aircraft, in three oceans, were assembled for coordinated manœuvres. We were told by the Secretary of State this afternoon something of the degree of surveillance that can take place these days. We were told by the United States Secretary to the Navy, Mr. Middendorf, that these manœuvres by the Soviet Union were controlled through a sophisticated, worldwide communications network, including satellites. At the same time that these Soviet naval exercises were taking place, Soviet aircraft were operating from bases made available to them in Cuba, Guinea, and Berbera, in the Somali Republic.
Recent events in Africa serve only to underline the political as well as the military implications of Soviet expansion. We have to face the fact in this country, in Europe, and in the United States, that approxmatiely 80 per cent. of the NATO Alliance's oil and 70 per cent. of its strategic raw materials move through the waters along the west coast of Africa, now vulnerable to air and naval bases in Soviet-supported territories, to whose Governments we are now, incredibly, seeking to give aid at the expense of our friends and allies. This is the threat about which so many of my hon. Friends, notably my hon. Friend the Member for Haltemprice (Mr. Wall) and my hon. and gallant Friend the Member for Winchester (Rear-Admiral Morgan-Giles) have been warning us for many years.
The White Paper shows how the balance of ready forces in the Eastern Atlantic has shifted dramatically in favour of the Soviet northern fleet. But what about the South Atlantic? What about the Indian Ocean, from which we have been retreating for years? The Secretary of State says, with apparent pride, that that retreat is now almost concluded. It may be that NATO's direct responsibility under the treaty is limited to the territorial areas of the member countries, but Britain, above all, has a duty, as a nation geographically and

historically aware of the oceanic dimensions of power, to react to the need for a new naval strategy. That was the message we heard this afternoon from my right hon. Friend the Member for Brighton, Pavilion, which I would wish to reinforce to the best of my ability.
In my view, we should be urging the necessity of a significant Allied presence in the Southern Atlantic and the Indian Ocean. We should be urging upon the United States and France—and possibly Australia, in view of the anxieties recently expressed by its new Prime Minister, Mr. Fraser—joint action in these areas. We should be declaring our willingness to provide arms for our friends and allies against external aggresion. We should be using our influence in every way possible to convince the nations of Africa and Asia that their newly won independence, no less than the security of the whole free world, now depends on containing Soviet and Communist expansion. That is the new imperialism, and it is far more ruthless in its modern guise than ever before.
The plundering tiger and its deadly cubs are moving into Africa, to the detriment not only of British and NATO interests but of the interests of the African people themselves, black and white. Instead of hearing any indication from the Government of the dangers created by the new trends—trends that were apparent even before the events in Angola—the warning signals have been showing for a long time—we have had produced by them a White Paper in which the whole of our non-NATO responsibilities are dismissed in eight short paragraphs in which the Secretary of State takes evident pride but which constitute a powerful indictment of the Socialist policy of retreat and abdication from shore to shore.
The right hon. Gentleman spoke of the political implications of defence and of the presence of forces. What an encouragement it is to an aggressor, and what a blow to the morale of those who look to us for support, to read those eight paragraphs. There is the shabby agreement forced upon Hong Kong, the breach of faith with Brunei, and the senseless abrogation of the Simonstown Agreement. There is the substantial reduction of our forces, notably the RAF, in Cyprus. That, coupled with our Fleet


withdrawals, makes nonsense of our commitments in the Eastern Mediterranean and to CENTO. There is even the withdrawal, announced with pride, of the Senior Naval Officer, West Indies and the announcement that Her Majesty's ships will no longer be stationed there. We see retreat after retreat.
Finally, in the face of a Soviet Fleet which Admiral Sir Terence Lewin has said now exceeds
anyhing that could be remotely justified simply for defence",
we have, in paragraph 55 of the White Paper, the frighteningly smug and complacent announcement that
The withdrawal of forces from the Far East and the Indian Ocean is proceeding according to plan.
That is some plan. It is much more like an epitaph. Even Gan is to be abandoned.
Next week we shall have a new Prime Minister. Let us pray that he will agree with the present Foreign Secretary who, on 10th November, said that we should not underestimate our potential influence in the world. It may be that our influence can no longer be dependent on military power. That is certainly the situation, as the Secretary of State said. But we still have the means, if we still have the will, to stand by our friends, wherever they may be. We still carry out a few exercises round the world. They are referred to on page 47 of the White Paper. That is almost the only reference to what is going on in the world about us.
We should not under-value the psychological and political importance of a significant permanent presence in some of these areas at present. Only thus can we demonstrate our positive commitment to our global alliances. Above all, let our new Prime Minister remember that in our time the true concern of men of responsibility is no longer the interests of their few but the destiny of us all.

7.42 p.m.

Mr. Alan Lee Williams: It would appear that my right hon. Friend the Secretary of State for Defence has very few friends in the House tonight. I do not know whether I shall be cast in the rôle of defender of my right hon. Friend this evening. I do not know whether that would do him any good.

Indeed, I am not sure that it would do me any good.
First, I want to make some complimentary comments about my right hon. Friend, but I shall have other comments to make in a more qualified way. I congratulate my right hon. Friend on producing a defence White Paper which, bearing in mind all the pressures upon him, represents a balanced statement. It maintains the essentials of support for NATO and, in particular, for the important central front. I agree with much of what was said by the right hon. and learned Member for Hexham (Mr. Rippon) on that matter, to which I shall return.
It was made clear to the country in two manifestos in 1974, and supported by the Opposition, that there would be a fundamental review of Government expenditure. Therefore, it should come as no surprise to right hon. and hon. Members that defence was bound to take its share of any cutback in capital expenditure. I believe that, had the Conservative Party been in power, it would have been forced to undertake a review of the kind undertaken by my right hon. Friend. That is beyond dispute. The country is faced with having to cut back in all areas. Therefore, no one should argue that defence should be immune.
I find myself in profound disagreement with my hon. Friend the Member for Salford, East (Mr. Allaun) in his contention that these cuts are phoney. I do not believe that these are phoney cuts in defence expenditure. Certainly we can point to an increase in defence expenditure for the first year or two years. I think that my hon. Friend would agree that this drift is due to inflationary factors. Any figures projected ahead are bound to show an increase due to that factor.
In the long term we shall see that these cuts are profound. It is to that area to which I wish to address myself. I agree that in the circumstances what my right hon. Friend has achieved has been commendable, particularly as there is and has been great pressure from the Treasury to make far deeper inroads on defence expenditure than has been achieved in the end.

Mr. Antony Buck: I understand, although I do not agree with,


the hon. Gentleman's commendation of there having been a long-term review, which there was. But, there having been that long-term review, which was supposed to set the pattern for the decade ahead, surely he cannot defend that there should be a further arbitrary cut and yet another arbitrary cut. Would he care to comment on that matter before passing to his next theme?

Mr. Williams: As I made clear, I think that, in the circumstances as they unfolded, had the Opposition been in power they would have come to the same conclusion as my right hon. Friend. I think that takes care of that point.
We can always criticise the way in which these things were done. We cannot always be accurate in tackling a situation of this kind in economic circumstances with which none of us since the 1920s and the 1930s has been able to make comparisons. We are talking about a unique set of circumstances.
This raises the question of the nuclear threshold, to which the right hon. and learned Member for Hexham referred. This area could cause great concern to some of my hon. Friends who seemed to miss this part of the argument. It is an important argument, and I am surprised that they should miss it.
If we pursue a policy of defence cuts which lowers the nuclear threshold, we increase potential tension in the world because we increase Soviet temptation. Certainly if the Russians feel that the nuclear deterrent becomes incredible—because the more we lower it, paradoxically the more incredible it becomes—we could reach a point at which Soviet strategists might say to themselves "In the circumstances, the Americans will never use the nuclear deterrent. The incentive for them to do so, in terms of the catastrophe which would fall upon the United States, is so huge that, for the sake of Soviet policy, we can ignore the Western nuclear deterrent."
I take the view that if that were to be the situation—it is not the situation now—tension would quickly rise. The Russians would be in the position of being the preponderant land power in Europe.
There has been a great deal of argument based on an essay written by a relatively junior officer in the Belgian Army. In that essay he postulated the argument that it would be possible for the Russians to get through to Calais and the Channel coast in a matter of days and that, in consequence, the whole of Western Europe would be overwhelmed in that very short time. That is a situation which might arise if present trends continued. However, it is dangerous to argue that that is the state of affairs today.
I believe that this White Paper gives us an opportunity to see the logic of events and whether we can at long last work out a defence policy which is not in piecemeal fashion forced upon the Government by economic factors. The Government must tell the Labour Party and the country that they cannot have a rational, sensible defence policy based on that criteria. They must say that in future, although we accept that in terms of the gross national product—whatever the figure may be—we shall not be spending more than the comparable figure expended by other members of the European element of the Atlantic Alliance, we ought to do as much as they, not less, and in the end we must recognise that, for our defence policy to remain credible, we cannot allow the present levels of defence expenditure to fall any further. That has to be stated fairly clearly. I think that my right hon. Friend made a start in that direction today.
The lowering level of conventional forces is of extreme importance on the question of the nuclear threshold. It is bound to have an effect on the American attitude to Europe. The Americans are going through a presidential election. One does not know what the result will be. However, one knows that the current attitude on Capitol Hill and in Congress is to be extremely critical about the European defence effort.
But I think that the Americans can help here. This is where I think my right hon. Friend is again arguing a very good case—that the Americans can help to make a reality of the two-way street. That, above all else, will be a great boost to the European military-industrial complex. There is no doubt that in this area of defence procurement the Americans are immensely competitive, but they have


not followed a very fair policy towards the European element of NATO. I think that they are beginning to recognise that, certainly at the political level. Let us hope that this will work in reality.
My hon. Friend the Member for Salford, East is arguing for further defence cuts. I should like to address a few remarks to him, although he is not in the Chamber at present. He quoted from a pamphlet written by Dr. Frank Blackaby. The basic thesis put forward can be summarised as follows:
A cut of £1,000 million in defence expenditure will require 60,000 people in each of five years to leave their jobs, either in the armed forces or in the industries which supply them; each year 4 million people change their jobs. So there is no problem.
I find that approach extremely questionable and dangerous. My own estimation, based on research that I have been able to do, indicates that if there were to be a £1,000 million cut in defence expenditure, based on the same criteria that I have quoted from Dr. Blackaby, 300,000 people would find themselves unemployed. In those circumstances, the Government—particularly a Labour Government—would be forced to invest large sums of money in alternative employment. In those conditions, therefore, any possible gains that there might have been from defence savings would evaporate.
My right hon. Friend has produced a defence White Paper which in all the circumstances can certainly command support from the Government Back Benches. However, a number of us will be prepared to warn him that he must in future make it absolutely clear that if some of the proposals being made by the National Executive Committee of the Labour Party, through its special study group, calling for cuts of £1.000 million in current defence expenditure, were to be accepted by the Government, it would mean not only industrial ruin for Britain but also that we would have a defence posture which would leave this country naked and defenceless.

7.54 p.m.

Mr. Russell Johnston: The first thing that is worth saying, speaking for myself at least, is that this is the best-written White Paper that I have seen during the last decade. It is actually readable, which is a great deal more than

one can normally say of White Papers of any kind. I take the rather simplistic view that there is no point in producing White Papers that are indigestible. A great many of them are. We may be shorter of guns than we were previously, but we appear to have got some good scriptwriters in the Ministry of Defence. That is something to compliment, as a start.
There are rather serious gaps in content, though as a primer and a guide to our defence structure the White Paper is most useful. It is very cagey when it comes to giving any indication of forward thinking, either in terms of Britain's conventional contribution to defence or, for that matter, on the future of our strategic nuclear force, as Polaris inevitably will become obsolete. Equally, there is a failure to recognise the low level of public awareness in defence matters—although I was glad to hear the Secretary of State say that he had the intention of producing in digestible form a much greater degree of information about defence than has hitherto been given.
I genuinely believe that there should be some structure and programme to inform the public at large that we have commitments which of their nature are both essential and reasonable, and that it should not be argued that defence spending could be cut further when the next blow of the economic crisis hits us, as it undoubtedly will at some stage. The responsibility lies upon the Government to cultivate public opinion in a reasonable manner.
The attitude that we, as Liberals, take to the situation now is that we feel that much of the argument that has been taking place today—not all of it, of course—has been conducted on the wrong plane. There has been too much emphasis on quantity and on cost, rather than on quality, effectiveness and value. One of the major gaps in the White Paper is any indication from the Government of the measures they propose to take to encourage the standardisation of equipment and joint operational tactics within NATO and, indeed, within Europe. The standardisation of equipment, quite apart from offering the only major area in which a saving can be made, is vital for the future, in terms of the efficiency of the whole of NATO.
The mistake is that the approach is being made from the wrong end. It is basically impossible to standardise equipment unless one gets the operational concepts correct first, unless one overcomes the—I was about to say "petty", but perhaps that is an unkind word—the essentially nationalist attitudes to defence that continue to exist. All right; we have flourishing NATO staffs, multinational staffs and quadrinational staffs, but the input to the strategy of NATO still tends to be fairly national. The consequence is that in the end it is still difficult to develop any common attitude to a common procurement policy and a common procurement agency.
The other day Dr. Luns estimated that NATO wastes up to £500 million annually simply by duplicating, as between one country and another, about 30 different anti-armour weapons, 20 different kinds of aircraft, and so on; there is a long list that can be advanced. The overall effect of that is subject to all sorts of estimates, but it certainly reduces the overall effectiveness of the Alliance in presenting an effective response to the threat from the Warsaw Pact countries, which the Secretary of State has clearly outlined.

Dr. M. S. Miller: The hon. Gentleman is developing a very important point. It is unquestionably true that the Warsaw Pact countries have a decided advantage in this respect, in that they have to a very great extent standardised all their equipment. However, does the hon. Gentleman appreciate that it is not merely a question of national commitments or national pride; there are also problems in the attempt being made at standardisation. Attempts are being made in many respects to standardise equipment, but one of the great problems is the time that it takes to reach agreements. When a large number of allies are joining together, it takes months, sometimes years, before agreement can be reached, and by that time equipment which has been thought about in the first instance has become obsolete. It is being found that that obstacle is very difficult to surmount.

Mr. Johnston: I am grateful for the hon. Gentleman's intervention. I do not dissent from anything he has said. It is a difficult matter, and it always takes a long time. I do not think that the

approach is made with sufficient enthusiasm.
When I look across at the Government Benches I feel that there is still a lack of enthusiasm about European institutions. When I look at the Conservative Benches I feel that there is almost a preoccupation with national defence. Those attitudes prevent both major parties from pressing with sufficient determination for a genuine European approach to defence, as opposed to a special United Kingdom approach, far less the approach outlined by the hon. Member for West Lothian (Mr. Dalyell).
One of the weaknesses of defence debates, and one of the reasons for the Liberal Party being most strongly in favour of the establishment of some sort of Select Committee on defence, is that it is very easy to go through a long list of weapons, shortages, and other matters. However, I shall mention one or two specific matters.
I intervened in the speech of the Secretary of State to ask about anti-tank weapons—an important question within NATO. A matter of great concern is the cut-down in the planned purchase of helicopters. It is of great concern, as the missiles that can be delivered from helicopters are perhaps the most effective mobile anti-tank weapons.
The White Paper emphasises that it is very important that NATO should continue to have the widest possible range of options. Cuts such as the withdrawal of Comets and Britannias from Air Transport have reduced the range of available options.
The hon. Member for Ayr (Mr. Younger) spoke at some length about the effectiveness of British forces in Germany—a subject that causes a great degree of concern. It was also mentioned by the right hon. and learned Member for Hexham (Mr. Rippon), who made a striking speech about the nuclear threshold. I agree with the hon. Member for Ayr that although BAOR is at present still up to the high professional standards it has maintained for a long time, there is a serious lack of training and a lack of supplies in certain areas because of the slow rundown in equipment. It is questionable whether there are adequate spares for the Chieftain tanks. The infantry armoured personnel carriers are


slowly going out of date. Unles something is done fairly quickly it is inevitable that standards will begin to drop. These are matters of considerable concern.
I turn briefly to the two amendments on the Order Paper. There is a tendency for the Conservative Party to emphasise quantity but not to indicate clearly where we shall get the money to pay for it. The right hon. Member for Chesham and Amersham (Mr. Gilmour) said that the Conservative Party would spend more money on defence. However, his party is calling for cuts in public expenditure. It cannot have it both ways. The money must come from somewhere. It is necessary that we face the realities.
Secondly, there is the Tribune amendment. Like other hon. Members, I must ask where the Tribunites are to be found. Where have they all gone? I regret that they are not present. They have an almost fanatical obsession that defence is somehow bad. That leads them completely to ignore the self-evident facts about the build-up of Warsaw Pact forces.
I wish that the hon. Member for Salford, East (Mr. Allaun) was in the Chamber. I should like to ask him whether he wants to have any defence at all. It is self-evident that if we reduce expenditure on defence we shall be able to spend more money on houses, roads, hospitals and schools. That is a trite observation and an obvious thing to say, but it is foolish to reduce defence to a point at which it is no longer of any use. At a certain stage we choose either to maintain the existing level or to have no defence. Any level between those extremes is quite pointless, and a total waste of money.
There is the familiar argument whether Britain is spending an amount of money equivalent to that spent by her NATO allies. There is the old argument about GNP and per capita expenditure, which I shall not rehearse, except quickly to quote the 1974 per capita figures—the most recent figures to which I have been able to gain access. The United Kingdom is spending 155 US dollars per capita as against the French spending 162, the Germans spending 182 and independent Sweden spending 211. It is clear that the United Kingdom is bottom of the league in terms of per capita expenditure.
It is unreasonable for the Tribune Group to ignore our low level of GNP and the obvious expense of maintaining an all-volunteer military force. Thirdly, the Ulster situation is a perpetual drain on our resources.
My conclusion is that the Conservative amendment and the Tribunite amendment—I know that the Tribunite amendment has not been selected, but it represents a significant view within the House—represent two aspects of unreality. In their different ways they both ignore certain facts. The Conservative Party ignores certain economic realities. If the Conservatives were in office they could not ignore them. The Tribunites ignore the demonstrable reality of the Warsaw Pact's growing strength.
In all the circumstances, I think that the Government's approach has the merit of being realistic and practical as far as it goes, although in my judgment it fails to outline a satisfactory defence strategy for the future along what really are the only possible lines—namely, the development of a European Defence Community and improved methods of collective defence.

8.08 p.m.

Mr. Ian MacCormick: I am not often in agreement with the hon. Member for West Lothian (Mr. Dalyell), but there were some things that the hon. Gentleman said with which I had to agree. When he made the amazing prognosis that Scotland will achieve complete self-government at the next General Election I wondered how many of his hon. Friends in the Labour Party shared his view. I do not suppose that it is shared by many. I believe that the sensible approach is the one that I have always adopted—namely, an amicable and orderly transfer of power over a period rather than some cataclysmic event, the like of which causes the hon. Member for West Lothian such fear and trembling.
I shall place my remarks on defence under three chief headings. First, I shall consider the strategic position in which Scotland finds itself. Secondly, I shall take up certain aspects of employment which are connected with the Defence Estimmates. Lastly, I shall consider briefly some of the more practical aspects of defence relating to Scotland.
I do not think that the mention of the word "Scotland" in this context need make any hon. Member shake with fear and dread of what will happen in future. A simple function of geography makes Scotland important in a strategic sense in the Western Alliance. But it is not simply a function of geography, because that would imply that the position occupied by Scotland in a strategic sense is static. Clearly it is not static. Because of the expansion in the last few years of Soviet naval power, it is true to say that the Soviet naval defence frontier has expanded as far westwards as to be on a line joining Iceland and Scotland. Whether we are living in Scotland in its present position, under some kind of devolved power, or in a self-governing Scotland, it will always be important for Scotland to help to maintain forces which can exercise a proper surveillance and provide facilities for proper deterrence to expanding Soviet naval power.
There is another reason for mentioning this matter which ties in closely with what the hon. Member for West Lothian and the hon. Member for Fife, Central (Mr. Hamilton) said. The effect of the move eastwards of the Soviet naval defence frontier means that the Secretary of State for Defence will have to look carefully at the question of the siting of our Polaris base at Faslane in the Clyde. It is not only possible but extremely likely that the Soviet Navy, with its present techniques, could shadow the entire British Polaris fleet in its moves from the Clyde to the Atlantic. That arises particularly because of the nature of the entrance to the Clyde estuary and clearly because of the relative proximity of that area to the areas in the North Atlantic from which the Soviet Navy is able to operate.
That being the case, I should be extremely interested to hear from the Government to what extent they are considering this matter. If we accept that it seems reasonable to move the Polaris base from the Clyde to, say, Devonport, it would then also be sensible to refit nuclear submarines at the same place as that in which they are based. I do not say that because I want it to happen, although I must say that I was originally opposed to the siting of a Polaris base on the Clyde because of its proximity

to the main centre of population in Scotland.
The second Report of the Expenditure Committee for the Session 1975–76 said that there were problems in regard to safety. That was one of the reasons the base was put in the Clyde. I am trying to say that it seems to be common sense—and this is a matter which I am sure the Secretary of State for Defence has considered—to move our Polaris base from the Clyde to Devon-port or some other place. Perhaps we may hear something from the Government spokesman on that subject.

The Under-Secretary of State for Defence for the Royal Navy (Mr. Frank Judd): If I am to deal with this point in my reply, it would be helpful if the hon. Gentleman would say what the SNP is advocating in this respect.

Mr. MacCormick: I was trying to indicate that nobody has a great deal of freedom to manoeuvre on this subject. I feel that it is inevitable, because of our strategic situation, that the Polaris base will have to be moved. That was the point I was making, and I was not seeking to make any party political point.

Mr. Dalyell: The hon. Gentleman says that he does not wish to make any party political point but I have his election manifesto which says:
The SNP does not want Scotland to have nuclear weapons or bases on Scottish soil or in Scottish territorial waters".
What about our obligations to NATO? Are they denied?

Mr. MacCormick: It is true that that is in our manifesto, but whether or not that were the case I ask the hon. Gentleman to appreciate that the base will have to be removed from Scotland because of the facts of the matter. In other words, it is no longer possible in terms of security to keep the Polaris base operating from an area such as the Firth of Clyde. Obviously it is easy for the Russian Navy to track every single one of our Polaris submarines as they leave port.

Mr. William Hamilton: Mr. William Hamilton rose—

Mr. MacCormick: I cannot give way to the hon. Gentleman at the moment. I am coming to the next point. Indeed this is a point mentioned by the Member for Fife, Central and relates to Rosyth.


If the move I have mentioned happens, it is more than likely that the present set-up in the Rosyth dockyard will be affected. I notice in the Second Report of the Expenditure Committee—and indeed this passage is underlined in black and is quite specific—
We recommend that the Ministry should start planing now for the possible closure of one of the four United Kingdom dockyards….
I know that it is not part of the present plan, but the danger exists. That danger is heightened by the fact that I believe it is inevitable that the Polaris submarine base will move away.

Mr. Bernard Conlan: Will the hon. Gentleman say from what page he is quoting?

Mr. MacCormick: I am quoting from page Ii in the introduction.
I wish to move on and no doubt my hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. Reid) will try to dot some of the "i's" and to cross some of the "t's" of SNP policy if he gets the opportunity to speak in the debate tomorrow.
I must re-emphasise that Scotland, as part of the Western Alliance, will have strategic significance in great measure. Scotland will also have practical needs. Some of these were sensibly mentioned by the hon. Member for Huddersfield. East (Mr. Mallalieu), who spoke about offshore installations and other resources which we must seriously consider protecting properly. However, this is not simply a question of oil rigs in the North Sea. Clearly once we extend our economic zone to 200 miles, an entirely new picture will emerge in policing these waters. That affects the fishing industry as much as it affects the oil industry.
I share the fears of the hon. Member for Huddersfield, East about our present state of preparedness. Again I wish to draw attention to what was said in the Second Report of the Expenditure Committee. On page xliv, paragraph 100 of that Report, we see:
Some features of the specification for the five new ships are unimpressive, particularly the relatively low speed and minimal armament …".
There at least is the germ of something which could be serious for the

future. I wonder—and this is an idea which I wish to throw out—whether in regard to the protection of our inshore areas we should think about creating a coastguard service similar to that in operation in the United States and shortly to be introduced into Canada. Since we face a situation where we never seem to have enough money to go round, that suggestion would give an opportunity to combine various functions that are at present spread among different people. For example, at present we have the Northern Lighthouse Commissioners who maintain expensive ships equipped with helicopters to look after the lights and buoys around our coasts, the coastguard service, which is minimal in many parts of Scotland, and the Scottish Office which controls and services the fishery protection fleet and, of course, the Royal Navy. This is a ridiculous number of functions being carried out under all these headings. The answer to this problem, as it is more of a policing function, might be the creation of a proper coastguard service.

Mr. Dalyell: On this important subject of the defence of our oil rigs, is this to be done by a British Navy or a Scottish Navy, a Scottish coastguard service or a British coastguard service?

Mr. MacCormick: One of the consequences of complete self-government would be that we would need the ability to police our own resources.

Mr. Dalyell: A Scottish Navy.

Mr. MacCormick: Whether it is called a Scottish Navy or a Scottish Coastguard, that would be necessary. In just the same way as the Secretary of State now operates the fishery protection fleet, we would require to operate it in future.

Mr. Dalyell: Put it in the records, Harry.

The Under-Secretary of State for Scotland (Mr. Harry Ewing): He wants a Scottish Navy.

Mr. MacCormick: If the hon. Member for West Lothian and the Under-Secretary have finished their private debate, I shall sum up my arguments.

Mr. Dalyell: A tartan Navy !

Mr. MacCormick: I wish that the hon. Member for West Lothian would bend his mind to look at the inevitable process of devolution in a co-operative, sensible and amicable way. If anyone is going to put a spanner in the works and prevent it happening amicably, it will not be myself. It is more likely to be he, by stirring up people's fears and inciting people to violent reaction. I have always been prepared to react moderately to any political situation, but what the hon. Member said earlier nearly made me lose my temper, which is saying something.
I was most impressed by the way in which the Secretary of State presented the White Paper because I believe that we in Scotland should play our part in the defence of the West both now and after self-government. I have advised my hon. Friends in the SNP to support the Government.

8.23 p.m.

Mr. Bernard Conlan: Far be it from me, as a mere Sassenach, to become involved in this domestic tartan argument, but I can clarify a point that was raised about the Select Committee's Report and its reference to the dockyards. We said that there were four major dockyards and that the reduced size of the Fleet no longer justified the continuation of all four. We recommended that consideration should be given to reducing the number of dockyards because of the comparable reduction in the size of the Fleet. However, we did not state our preferences.

Mr. MacCormick: I merely made my point as part of my comments about the possible withdrawal of the Polaris bases from Scotland.

Mr. Conlan: Even if the recommendations of the Select Committee were accepted, they could not be finally implemented until the 1980s. The decision is for some time in the future.
As I am the fourth successive speaker from the Government side who is prepared to support the White Paper, I may be considered guilty by association, but mere are proposals in the White Paper which are well worth supporting.
The hon. Member for Ayr (Mr. Younger) accused the Secretary of State of claiming that the proposals in the last

two White Papers—which cannot be viewed in isolation, as they are part of a continuing policy—were taken for military reasons, but everybody knows that they were taken for financial reasons. The Labour Party made it perfectly clear in the 1974 elections that in existing economic conditions we could not afford to spend, on defence, the amounts projected by the previous Government.
We said that we would take steps to reduce defence expenditure, and the Government have done this in conformity with their election manifestos and commitments. I am pleased that these decisions have led to a concentration of our defence effort in NATO and in Europe. It has been anachronistic for us to have forces in so many different parts of the world.
I am pleased that, with the exceptions of the Falkland Islands—one of our few remaining dependencies—Belize and Hong Kong, there will be no British forces outside the NATO area by the end of this year. That is a creditable performance by the Government and a programme for which many of us have been arguing for a long time.
It was also pleasing to hear the Secretary of State re-affirm that NATO is the linchpin of British defence policy.
We must have a credible defence policy. We must find the money to ensure that our forces are properly equipped and of an adequate size, and that their weaponry is of a proper standard. If we will the end, we must will the means. That means that we have to find the money to pay the forces properly, give them good conditions, and provide them with weapons.
I am an ex-engineer who worked for many years producing weapons for the forces. In my opinion the cuts will inevitably lead to large-scale additional unemployment. Some of my hon. Friends say that they will not lead to additional unemployment, and that there will be alternative jobs available, but I find it difficult to swallow that argument, because already we have 1,200,000 unemployed, many of whom are members of my union. Jobs are not available for them. In the North-East we have a rate of almost 10 per cent. unemployed, many of whom are engineers who could be employed on making ships, tanks and


guns, but the work is not there. If more people are made redundant by these cuts, inevitably there will be additional unemployment.
I heard with great interest my hon. Friend the Member for Huddersfield, East (Mr. Mallalieu) say that if the forces in Hong Kong are there for internal security purposes the Hong Kong Government should be 100 per cent. responsible for the cost. I totally agree with that. It is true to say that they are there for internal security purposes, because they have no chance of resisting any would-be aggressor from the north.
We must consider the new costs agreement against the background of the old arrangements, which were totally unsatisfactory to the British taxpayer. The Hong Kong Government made a fixed annual payment to the British Exchequer as a contribution towards the cost of the forces there. With inflation, that payment, in percentage terms, has become less and less. As a temporary measure the new agreement is an improvement, because for the first time it ties the Hong Kong Government to a percentage payment. As a percentage of the total cost, the Hong Kong Government will pay 50 per cent. this year, 62½ per cent. next year and 75 per cent. in subsequent years. That is a great improvement on the old arrangements.
We are engaged in the exercise of saving the British taxpayers' money, because of escalating costs, but what is happening in Hong Kong with the Gurkhas will add to the cost rather than reduce it. The Gurkhas have five battalions, which the White Paper proposes should be reduced to four. Three will be used in Hong Kong and the fourth will be on reserve and used as a rotating battalion. Where will that battalion be stationed?
At present there is a Gurkha battalion in Brunei and, according to the White Paper, negotiations are proceeding with the Sultan of Brunei for the withdrawal of that battalion. That fourth battalion will have to be housed somewhere. The military advisers say that it is required as a reserve for internal security purposes in Hong Kong. The battalion will probably remain in Brunei. We shall use the excellent training grounds there but

will have to pay for the privilege. We shall also have to pay the full cost of that fourth battalion whereas at present, in the absence of any new agreement, the Sultan pays the total cost. When we are trying to save money for the British taxpayer, it is a crazy exercise to enter into a new arrangement which, by definition, increases costs.
I ask my hon. Friends to look at the problem of the Gurkhas and Brunei once again. If they proceed with the proposals contained in their White Paper it will mean that the British taxpayer will pay more and not less.
Finally, there are tremendous savings being made as a result of the proposals in last year's White Paper, and to be made as a result of the proposals in this year's White Paper. The Conservative Party is in great difficulty on defence. Constantly it is clamouring for cuts in public expenditure, and defence is the only area in which it is clamouring for increased expenditure. It is attempting to reconcile higher expenditure on defence and lower expenditure on the social services.
The Labour amendment is at the other end of the political spectrum. It regrets that the Government have not cut further the expenditure on defence. I believe that the Government are pursuing a sensible middle road between the two extremes, and that is the sort of policy I support.

8.38 p.m.

Colonel Sir Harwood Harrison: I congratulate the Secretary of State for Defence on holding during last year the chairmanship of the Eurogroup. In doing so I am sure that he added stature to himself and brought great credit to this country. I am sorry that the right hon. Gentleman has had to leave—I know for good reasons—and I ask the Minister to be kind enough to convey my remarks to him. I know that in the Eurogroup he stressed as much as he could the need for rationalisation.
People from all the countries concerned say how necessary rationalisation is, but very little is done about it. Therefore any encouragement in this direction is to be applauded. I know that the Secretary of State is dedicated to it, and although he has now given up the chairmanship of the Eurogroup—it has gone


by rotation to a Belgian—I hope that he will continue to press for rationalisation as hard as he possibly can.
It is hard to get agreement on rationalisation. This is understandable. Countries do not want to give up certain national interests which may affect their employment, or possibly the making of weapons which they consider to be essential in their own defence. Nevertheless, we must never as a nation give up trying to achieve rationalisation.
When I visit West Germany and other NATO countries, the commanders always stress how much more effective their troops would be if there were complete interchange of weapons and the common use of airfields. I therefore urge the Secretary of State once again to continue trying to achieve this. When we look at the excellent diagrams of NATO forces in the White Paper, we ought to write of 25 or possibly 50 per cent. of the strength because there is no rationalisation in the Alliance.
I was very glad to hear my right hon. Friend the Member for Chesham and Amersham (Mr. Gilmour) pay tribute to our Leader's speech in which she alerted the country about the growing might of Russia's rearmament. It did not make headlines just for one day. They continued for a week, 10 days or more. Her speech made the ordinary man and woman in the street more alive to the danger, which is well known by our troops in Germany, than almost anything else could have done. For that reason, she should be congratulated on making that speech.
I am extremely glad to be called immediately after the hon. Member for Gateshead, East (Mr. Conlan), because he is a member of the same Sub-Committee as I am and has been since it started, and I know perhaps more than other people the very valuable work that he does on it.
Recently, our Sub-Committee published a major Report on defence which sought to assess the effectiveness of the Government's defence policy in relation to expenditure following the 1975 Defence Review. When it was made public some five weeks ago, it received an extremely wide coverage in the national Press. Our Report took as its starting point last year's White Paper. However, the policy has not

markedly changed, and the conclusions which it reached still stand.
The Sub-Committee conclusions were agreed unanimously. The significance of that will be seen when I remind the House that the Sub-Committee, of which I have the honour to be chairman, is comprised of four Members from the Government side and four from the Opposition. In view of that, I hope that the Government will note the very serious warnings that we give in our Report about the effects of successive rounds of defence cuts.
I turn now to the different branches of our Services. One aspect of our Report which attracted much publicity was our recommendation that there should be a most stringent review of air defence requirements and of alternative ways of meeting this need until the air defence variant of the MRCA is confirmed.
As we all know, earlier this month, shortly before the Defence White Paper was published, the Secretary of State announced that a major review of the project had been carried out and that the Government's intention was to confirm the orders for all 385 MRCAs, including both strike and the ADV types.
In several of our Reports, my Sub-Committee has commented very favourably on the MRCA project as a whole. No one who has seen it fly could fail to be impressed by the technology and the encouraging example that it provides of a successful collaborative project. None the less, the House must be warned that we have not yet been satisfied that the ADV is entirely suitable for all its planned rôles. What is required from the point of view of the United Kingdom and its air space is an interceptor, for which task the ADV should be appropriate. In addition, we should like some further assurance that the ADV will be adequate as a fighter for service with the RAF in Germany as well as in this country.
The projected performance characteristics of some existing American alternatives or, for that matter, the Warsaw Pact fighters appear to be better than those of the MRCA which, as I understand it, will not go into commissioned service for some years yet. Like the rest of my Sub-Committee, we hope that the Minister can convince us of the wisdom of his decision.

Mr. Frank Allaun: Could the right hon. Gentleman please repeat what he has said? I am most intrigued. Was he saying that the MRCA was in certain respects inferior in ability to planes from Eastern Europe?

Sir H. Harrison: We would like, and I believe the House would like, the Minister's assurance that it is all right. In shipbuilding, we voiced concern that the shipbuilding weapons' system was falling badly behind schedule. The first anti-submarine warfare cruiser, HMS "Invincible", being built by Vickers at Barrow, has been seriously delayed and its in-service date has slipped. The type 22 frigates planned to carry the Sea Wolf point defence anti-missile system have also substantialy slipped back. I do not intend to develop the reasons for these and other delays but I should warn the House that there are two very serious effects.
It has meant that in the case of the anti-submarine warfare cruisers, the existing converted helicopter cruisers "Blake" and "Tiger" are now planned to run for longer. Thus, these vessels will have to be either refitted, manifestly an uneconomic task, or they will operate in an inefficient condition and at considerable cost both in time and money. A more serious point to note is that this new planned equipment will not be fitted in purpose-built hulls so that the effective lives of the missile systems will be less than hoped for, and the technology may be outdated soon after they come into service.
With every delay costs are increasing, since old equipment is uneconomic and the production costs of new ships and weapons systems have risen. We welcome the Harrier, also added to the programme, but I understand that it will not now be deployed as early as was originally hoped. I know that Ministers are aware of the very serious consequences of these delays and trust that in the next year the saga of delays will not be repeated and that everything will be done to correct this potentially grave situation. It is important that missiles are in the right weapons to make full use of them.
I will now speak of the Army. In our consideration of the Army after the 1975 review our deliberations have been dominated by three factors—how to sustain our contribution to the central front in the wake of defence cuts, the need to

get into service as quickly as possible the guided missiles so essential to defence against the Warsaw Pact predominance of men and armaments, and the success of the Army restructuring in BAOR. We welcome the assurances given throughout the past year by Ministers and officials—and we have met many—in the Ministry of Defence that the Army's commitment to the central front is unchanged.
One of the results of reducing the command structure in Germany is to ensure that the number of fighting troops there is kept up to strength. None the less, we have some reservations about the situation in Germany and we hope that the Minister will be able to tell us or to publish fairly soon his conclusions on the exercises which have taken place on restructuring. Some of the cuts announced in the defence review of 1975 have had, or will have, effects on BAOR which I need not develop for they have already been mentioned in the debate, particularly in relation to the supply of spares and petrol and the training of tank drivers. After all, men join certain regiments to drive tanks and if they are limited in doing so they feel that they have had a very bad deal.
There is also the reduced helicopter programme, the cancellation and deferments of vehicles, ammunition, weapons and electronic systems. All of this contributes to the overall picture. This does not affect the front line directly but it concerns the support given to front line troops. It reduces the capacity of BAOR to sustain its rôle on the central front If the British corps is to retain its efficiency, the successful introduction of the new Army structure is even more important.
I want to comment on the planned—I believe it is a firm decision—purchase of the Franco-German Milan manned portable anti-tank guided weapon. I believe that there is still some negotiating to be done. I and my Committee saw a demonstration by West German soldiers of the weapon which was most impressive. Almost every general and brigadier to whom we spoke went out of his way to impress upon us how much they wanted Milan. This purchase fills a gap in our defences against Soviet tank forces and is to be welcomed. Nevertheless, we feel that there are some serious lessons to be learned from the purchase


and the cancellation by the Ministry of the Hawkswing helicopter-borne ATGW which has been abandoned without a direct order for a competing foreign weapon being made.
British industry has the capacity to build first-class missiles and with encouragement from the Government would dearly love to do so. Unfortunately in the case of Milan no comparable British system was started until the early 1970's, by which time the Milan was almost ready for purchase. The Army is now being forced to buy a stop-gap weapon to meet a need which it might have seen developing years before.
It is unfortunate that in the case of Hawkswing, industry was commissioned to build a weapon, the requirement for which was altered after the main development work was done. My Committee will be reporting on the guided weapons industry later this year or early next year. We feel that perhaps the Army said that it wanted a weapon which would achieve very nearly the impossible. Industry, tried to produce it and perhaps it failed. But then the Ministry stepped in and bought something which was inferior to the product which had been demanded of British industry.
Greater co-ordination is needed between the needs of the Services, Government and industry so that the maximum use is made of the capacity of British industry to provide the required weapons and services. This does not mean that in future we should not collaborate in European consortia to produce weapons. We should do so. But greater emphasis should be placed in future on the coordination of all national interests.
I will not bandy figures about on this question of defence cuts. We have had too much of that. I would like to single out aspects from each Service to show some of the problems facing the Secretary of State and his Chiefs of Staff who, in a way, have to take even harder decisions than the Secretary of State. In the defence review the Government pruned several hundred million pounds a year from projected defence expenditure over the review period. Since then further cuts have been announced, £135 million for 1976–77 and more than £5 million in the three following years. This leads me to stress what was perhaps the most important

lesson that my Sub-Committee learned in our inquiry—that further substantial cuts in spending will have a calamitous effect on current and future defence policy. A senior official from the Ministry said in evidence to the Sub-Committee that we had reached the limit, that we could not cut any more—but now we are making further cuts. That official was backed up by serving officers.
There is no scope for significant cuts in the number of Service men since our forces are already over-committed in BAOR and Northern Ireland. Any further reductions would stress beyond measure the precarious balance in Europe. I was glad to hear the Secretary of State say that he was keeping this under constant review because it is important to the resolve of the nations of NATO that they should be able to rely on collective security.
Witnesses told the Sub-Committee that we had reached the limit in savings on arms and equipment and that no further cuts could be made. Although cuts do not have an immediate effect, by 1980 lower levels of expenditure would result in the Services holding fewer and less modern weapons and losing their deserved reputation as a first-class fighting force.
I welcome moves by the Secretary of State carefully to review the support and administrative elements of the Ministry and the Services. Having reduced the front line, it is right that other elements should be equally stringently reviewed. We welcome reductions in the number of civilians employed in support functions. We hope that the management review of the Ministry will contribute to the economy drive. I trust that my Sub-Committee's suggestions for centralising certain support functions of the Services will be taken into account.
Defence cuts inevitably result in reductions in jobs in service, civilian and industrial employment. In our Report we recognise the loss of job opportunities in the defence review. If further substantial cuts were made in line with those suggested by hon. Members in the Labour Party below the Gangway following Labour Party conference resolutions, the effect on unemployment would be dramatic. The savings of £1,000 million a year would result in the loss of 150,000 jobs and there would be redundancies


both among Service men and civilians. The aerospace and guided weapons industries would be decimated with the loss of many thousands of jobs. Those making further shrill demands for cuts should take that into account.
I support the Secretary of State's determination not to cut further the major elements of our defence services. The pressure for further cuts will be strong if the economic growth based on the 3 per cent. mentioned by my hon. Friend the Member for Ayr (Mr. Younger) is not achieved. I warn the Government that if pressure to reduce the size or amounts of our forces is acceded to, the future for Western defence will be grave.
As an old Territorial soldier, I believe that the Territorial Army is still too small. Recruiting is going very well. Sadly, that is because of the high rate of unemployment.

The Under-Secretary of State for Defence for the Army (Mr. Robert C. Brown): If the hon. and gallant Gentleman is talking about the high rate of recruiting for the Territorial Army, he must be mistaken when he links it with the high rate of unemployment. If he were talking about the Regular Army, I might take the point.
The present recruiting campaign for the Territorial Army is going exceptionally well, and no one would be more pleased than I if we reached our target this year.

Sir H. Harrison: I am grateful to the Minister for that intervention. He has more figures than I have. I agree that unemployment affects Regular Army recruiting, but it also affects TA recruiting. I obtained my information from a certain source. No doubt the Minister's source is much better.
The Government are taking a bit of a gamble by making the cuts. It may come off, and none of us would wish that it did not. But we are gambling with the lives of our wives, children and grandchildren by taking the easy course now. That is what worries me.
I hope that the Minister will give us a good reply to the debate.

9.2 p.m.

Mr. Stan Thorne: The hon. and gallant Member for Eye (Sir H.

Harrison) referred to weapons that achieved the impossible. He said it with some relish. I do not want to pursue that point. We are talking about £5,632 million of expenditure. We hope that what is produced for that money will never be used. We are toying with expenditure for nothing or for death—death in a nuclear war.
In the Defence Estimates we are deliberately setting out to allocate mammoth resources not to beautfy life, to improve our health services and fight disease, to provide our children with a good education, to look after the elderly, the sick and the disabled, to build houses for the needy, or to clear our environment of pollution. No. We restrict expenditure in those areas in order to spend £5,632 million on defence. "Defence for what?" seems to me a reasonable question to pose.
Who are the enemies against whom we are defending ourselves—the enemies of whom we constantly hear talk? Let us assume that they reside in the East. They possess nuclear weapons. We are a tiny island, which, incidently, is devoting £985 million to the European theatre of ground forces. One wonders how they would be useful in the event of a nuclear war. Should that happen, it will mean death to the British people.
The hon. and gallant Gentleman referred to our wives, children and grandchildren. I, too, am concerned about them, but I do not want to benefit them by pursuing activities that inevitably lead to war. I suggest the opposite point of view—that we should be directing our attention to producing for peace.

Mr. Mason: Mr. Mason rose—

Mr. Thorne: I shall not give way.
We are to spend £702 million on research and development. One could speculate on the impact of the yearly expenditure of £702 million on, for example, cancer research. In my constituency—the Secretary of State for Defence congratulated himself on this very recently—there will be produced 385 military aircraft, the MRCA.

Mr. Mason: Mr. Mason rose—

Hon. Members: Give way.

Mr. Thorne: I would like to point out that the Secretary of State is of the


opinion that this is of value because it means that the work force of British Aircraft Corporation, Preston is now protected against the prospects of unemployment. To my mind mat is the most damning comment on the nature of our so-called civilisation—the fact that in order to provide workers with the opportunity to use their skills, we can manage to produce only a multi-rôle combat aircraft for purpose of destruction.
As far as I am concerned this is not a matter of votes or seats on these Benches, or the retention of a Labour Government, or anything of that description; I stand up and firmly repudiate this sort of expenditure when there are so many tremendous needs now facing the people of Britain.

9.7 p.m.

Mr. David Walder: It is, of course, a pleasure to speak following the hon. Member for Preston, South (Mr. Thorne), who is a near neighbour of mine. I am sure that that speech will go down a treat with those of his constituents who work in the aircraft industry.
This debate has been one of attitudes as much as armaments. It was recorded, I seem to remember, that Mr. Haldane, the great Army reformer in the nineteenth century—he knew much more about philosophy than he knew about soldiers—one day, when he was Secretary of State for War, was approached on Salisbury Plain by a puzzled general who said, "Please, Mr. Haldane, what sort of Army are you planning?" He answered with one word, "Hegelian." That must have made it very clear indeed. We are justified today in feeling a little like that general. Haldane's Army reforms were successful, but so far I have identified in this debate only two Labour Back Benchers who are positively in favour of the Secretary of State's proposals.
We must question the Government's cuts on the grounds both of logic and of the philosophy behind them. The 1976 White Paper must be read in conjunction with its predecessor in 1975 and considered with the Chancellor's arbitrary swipe of £110 million, interposed between the two White Papers. I accept, of course, that all Governments, whether they are democracies or dictatorships, or of whatever complexion they may be in this country, must look critically at the cost

of our Armed Forces and must apply standards of efficiency and economy, as with every other spending Department.
The hon. Member for Inverness (Mr. Johnston) questioned the attitude of the Conservative Party when we sought cuts in Government expenditure, save in this respect. He seemed to regard that as a curious attitude, but this is not so at all. I seem to remember that the language of Socialism is a question of priorities. So it is for Conservatives, and I presume it must be for the Liberal Party, as well.
In defence matters, we must beware of a myth and a temptation. The myth goes back a long way, certainly as far as the time of Mr. Gladstone, who regarded the Army and the Navy of his day as the great spending Departments. Perhaps that was true, but not today. But defence is also a temptation for the short-sighted politician. Expenditure on defence shows no obvious returns—no houses, roads, schools or hospitals to which a Government can point with pride, no increase in pensions or benefits to which they can refer. I must say, in passing, that those achievements are a little thin on the ground, at present, anyway. There is always a temptation for a Government to create advantages of that sort and then to woo the electorate with them at election time.
Inevitably, there is considerable defence expenditure on equipment, wages and pensions, with nothing to show. There is expenditure on new and necessary generations of aircraft, tanks and ships with nothing to show. Nothing, that is, save one thing—more than a quarter of a century of peace in Western Europe.
That brings me to the curious logic of the two White Papers. Both sides of the House—minus 83 hon. Members on the Government side—would accept that this White Paper begins with an impeccable analysis of the military balance, supported by graphs and diagrams which are comprehensible to the least expert—I had almost said "the meanest"—intelligence. No hon. Member, wherever he sits, would say that those figures were wrong.
What do the figures show? The White Paper says that
During the past year, the military capability of the Warsaw Pact has increased in numbers and in quality.


We all know that there has always been a preponderance of numbers in the East. They have large conscript forces, maintained by a military society. There is no doubt—and I stress it—that it is a military society.
Now, however, any comfort that the West might have gained from technical superiority in the past must be discarded. In the East, there is an offensive capability—which I distinguished from a purely defensive one—with the ranges of weapons, aircraft, ships and submarines all increased. Targets in the West have been brought closer and the destruction which can be wrought has been increased.
That is all set out in the preamble to each of the two White Papers. Despite détente, despite the Helsinki Conference on Security and Co-operation and whatever may be decided at Belgrade in 1977, despite MBFR, we in the West are still entitled, indeed, bound, to ask the reason for that build-up in the East. We are entitled to be suspicious. As the White Paper says, the objectives of MBFR will not be achieved without a more even military balance between the two sides than exists at present, and
The latest Warsaw Pact proposal is designed to preserve the disparities between the forces of the two sides.
In the interests of their own people, any responsible Government in the West, and this Government in particular, must ask why.
The two White Papers plainly state the problem and the danger. We might therefore reasonably expect that we in Britain would be called upon to forgo cuts in defence expenditure, or even prepare ourselves for increased expenditure to strengthen our forces. But no—this is where logic and reason depart. Information about the danger in a harsh world is used to justify a reduction in our insurance against it. The Secretary of State for Defence is saying that there is now more danger of fire than hitherto and that therefore we can spend less on our precautions—less on fire insurance.

Mr. Mason: I assure the hon. Member we are pointing our extinguishers in the right direction.

Mr. Walder: I should like to know whether that was intended to be a helpful remark.
There are other arguments in the White Paper. They are specious and spurious, and they have been seized upon avidly by the supporters of the Left-wing amendment. They concern the level of spending of our NATO Allies. A number of my right hon. and learned Friends have disposed of that argument, and so I do not intend to rehearse the deficiencies regarding what I might call the GNP argument as being conclusive on defence matters.
Once again, therefore, we ask why we are being called upon to accept defence cuts when the dangers in the East have increased, and why we are being asked to compare ourselves with our Allies in Europe who do not necessarily have the same responsibilities as we do. No right hon. Member, 10 years ago, would have predicted that we would today have 16,000 troops deployed in Northern Ireland. We are getting dangerously near the situation in which we shall have no emergency potential available in the United Kingdom.
The reason why the White Paper has been cast in this form is fairly clear. It becomes clearer from an examination of the names of the 83 signatories to the Left-wing amendment. The reason is simply internal pressures within the Labour Party. In the last two years we Conservatives have heard that the Secretary of State and his junior Ministers have fought a tremendous battle to resist the three sets of cuts. Of course, they have our sympathy, but they have lost the battle. However sympathetic we on this side may be, there are limits to which we can go.
We are dealing only with comparatives in this matter—bad and worse. The Secretary of State cannot be acquitted entirely because both he and, for instance, the hon. Member for Salford, East (Mr. Allaun) are here on the Labour ticket. Most times they are to be found in the same Lobby—though I do not know whether they speak to each other there. When there are proposals for increases in expenditure in all the areas of nationalisation, which will produce nothing and do nothing to improve the lot of their fellow citizens they are in the same lobby. The Secretary of State, the hon. Member for Salford, East and their respective followers vote and act together like a happy band of brothers. The


left wing of the Labour Party, which comes to these debates, with all the enthusiasm and expertise of faith healers going to a conference at the Royal College of Surgeons, is arm in arm with the right wing of the party which only says apologetically that it does its best to keep the left quiet. Not very well, apparently.

Mr. Frank Allaun: I enjoy the speeches of the hon. Member for Clitheroe (Mr. Walder) almost as much as I enjoy his novels. He referred to the internal pressures that gave rise to the 83 signatures. Of course those pressures exist. They come from people who have no homes, who have inadequate pensions, and whose children have no nursery schools. Is it conceivable that the hon. Gentleman, for whom I have the greatest respect, does not find these kind of pressures in his constituency? He must be a very insensitive man if he does not have them.

Mr. Walder: Of course pressures for that kind of expenditure exist. But I acquit myself of insensitivity. I hope that I can do the same for the hon. Gentleman. Has he not got constituents who are worried about our position vis-à-vis the threat in the East? Are they not concerned with security? Are they not concerned with preserving the very liberties which they use to complain to him about their lot? They cannot do that on the other side of the Iron Curtain.
The truth about defence cuts can be put very shortly. I should like to quote the words of a great civil servant. I shall do so carefully, and the House will understand why. My right hon. Friend the Member for Chesham and Amer-sham (Mr. Gilmour) has already paid tribute to Sir Michael Cary, the former Permanent Under-Secretary of State. On 15th October he gave a lecture to the RUSI on "Britain's Armed Forces after the Defence Cuts". I stress that he made it quite plain that he spoke as a civil servant and within his duty to the elected Government. When answering questions he did not stray beyond the bounds of his appointment, but he said:
If the real brunt of your question is, would it have been better if we had not made any cuts at all?, speaking simply as the Permanent Under-Secretary of State … I would say 'Yes of course', but that was not the problem with which we were faced.

That may have been the attitude of the Secretary of State for Defence, too. But in his case the Government and the Labour Party—perhaps I should more properly say the Labour Party conference—made the decision. Despite the dangers stated in two White Papers and the risks that were made obvious in their preambles, which are apparent to anyone who is neither impossibly naive nor politically motivated, a decision was made to cut expenditure on defence. Therefore, we have to be satisfied with smaller, more over-strained Armed Forces.
What I find inexcusable is that the Government come to this House and argue that, despite the reduction in manpower, teeth and tail—I maintain that distinction is becoming more unreal as we look at modern armed forces—and despite the cutback in R and D, because of their great review, all is well, if not better than before. That argument has been dressed up with a great deal of information, of which I understand the Secretary of State is proud. One is happy to receive that information and to look at the nice diagrams and hear about the bird protection unit, and so on, but I suggest that all that information is there as a smoke screen. It is an insult to our intelligence. Perhaps that does not matter. However, it is an insult to the right hon. Gentleman's intelligence and to the Service men and women who have to operate within the new, very tight limits. Worst of all, it is an insult to the intelligence of the electorate.
My last point goes back to the philosophy of expenditure on defence and concern over defence matters. The Minister of State put his finger on the problem when, in a previous defence debate he said that at the heart of every Socialist there was a pacifist. That may be so. I think that is true of all of us—not least those of us who have experience of wars, whether large or small. However, there is no pacifism on the other side of the Iron Curtain or, indeed, in a number of other disputed parts of the present harsh world in which we have to exist. That is sad, but true. Therefore, I think that for anyone who takes advantage of the benefits of a civilised democratic society, pacifism is something of a luxury. Ultimately it depends on the willingness


of other men and women, in certain circumstances, not being pacifists. I admire the genuine pacifist if he says "I am prepared to live in the desert on a diet of honey and locusts". But if, on the other hand, he enjoys all the benefit of a free society without considering at any time how that freedom is preserved, I suggest that there is an element of hypocrisy in it.
The potential threat to our society has been spelled out. We lower our capability to resist at our peril. However, it is obvious that in the Labour Party there are at present patently many who care and are concerned about defence issues. They may have differences with the Opposition side of the House, but at least with them we can have a meaningful dialogue. Others are complacent. Some have deluded themselves. Some others are prepared to go on from that position to attempt to delude others. Some others—this is the sadness of the attitudes that have been revealed in the debate—plainly do not care about the defence of the very liberties and freedoms that we are exercising in this House tonight.
Therefore, quite obviously, for the reasons I have set out—some of logic and perhaps some of sentiment—we on the Opposition side of the House, when the vote comes tomorrow night—I would inform the hon. Member for Argyll (Mr. MacCormick) that it is tomorrow night and not tonight, as he thought, however happy he may be in his bell-bottomed trews—we shall support our amendment, and we shall be fascinated to see what happens to the 83 hon. Members who have put down another amendment which demonstrates the divisions on the Government side of the House and, I think, reveals much of the motive for the defence cuts which have been introduced by the Labour Party.

9.27 p.m.

The Under-Secretary of State for Defence for the Royal Navy (Mr. Frank Judd): The whole House will want to congratulate the hon. Member for Clitheroe (Mr. Walder) on his characteristically thoughtful contribution to the first major defence debate in which he has been able to speak from the Front Bench. We shall look forward to many such contributions in the future. We know of his deep interest in defence. We are all

eagerly anticipating the outcome of his current studies of the life of Nelson, but we ask him not to become so preoccupied with that distinguished hero in our military past that he should insist on always looking at defence policy through the wrong end of his telescope.
Several hon. Members on both sides of the House have paid tribute to Sir Michael Cary and to Field Marshal Montgomery. Again, the whole House will want to join them in the tributes to two distinguished men. They are, indeed, a sad loss to the nation.
At the beginning of my remarks, I know that the House will forgive me if I specifically pick out the hon. and gallant Member for Eye (Sir H. Harrison) and pay tribute to his work and the work of his Sub-Committee of the Select Committee on Public Expenditure. It has contributed a great deal to the knowledge and learning of the House about defence matters. All Ministers, indeed everyone in the Ministry of Defence, treat with great seriousness the criticisms and observations which he and his colleagues bring forward.
A great deal has been said this afternoon about the threat. There can be no doubt that the efficiency and strength of the Soviet armed services remain high in the priorities of their leaders. As Marshal Grechko has recently put it,
The main thing is that our Armed Forces have become more vigilant and powerful and have raised the level of their training and readiness. Sure and steadfast they follow the paths shown them by the Party and the Central Committee.
Whatever the commitment of the Soviet Union might be—intentions are one thing; they can change overnight-capabilities are what must guide us in shaping our defence policy. Russia has an improving military capability which could be used not to attack—we do not believe, as my right hon. Friend has said today, that that is in their scheme of things—but rather to nudge and elbow the world beyond the confines of the Warsaw Pact.
Confronted with this reality, the cause of detente and multinational disarmament remains the basic commitment of our Administration. In an age of possible mass destruction we must never lose sight of this objective as the ultimate guarantee of peace and stability. The road is a long and difficult one, but we must not


allow ourselves to be sidetracked by pious hopes or the deceptive shadow of progress. As Dr. Sakharov has reminded us this week, nothing short of fool-proof international controls will do. I am convinced that progress in this sphere hinges on the ability we now have to negotiate from a position of collective strength.
I know that many intelligent and sensitive people recoil from all the paraphernalia of a modern defence system. I do not condemn them, but I echo what was said by the hon. Member for Clitheroe. Looking back over the past 28 years of tempestuous European political affairs, would we have been able to avoid a devastating conflict without the stability provided by the balance of military power and deterrence? Clearly, we must not become prisoners of this stalemate, but equally clear it would be unwise to advocate the dismantling of the system before we have developed a new relationship between East and West founded on rock-like guarantees.
Against that background the NATO Alliance has moved away from the former trip-wire philosophy to one of deterrence by the capability for flexible response. We do not need within this new posture to match the Warsaw Pact forces man for man or gun for gun, but we must be able to make a balanced response to contain any initial aggression, allowing time for diplomatic initiatives to be mobilised. To leave a gap in our ability to respond in such a way could well prove fatal. We might then be faced with having to back down or to escalate to an unacceptable degree—for example, by the use of nuclear weapons. To put it more bluntly, we could be faced with Hobson's choice. Our aim is to pose a sufficiently convincing question mark to deter the Warsaw Pact from embarking upon military adventurism in support of its political objectives.
We must ask ourselves about the implications for the West if the Russians ever established the ability, unchallenged, to isolate Europe by sea and to prevent the passage of essential supplies and reinforcements from the United States. Such an ability would obviously demolish the whole credibility of the strategy in the central region.
It is clear that we on this side of the Atlantic cannot escape our obligations to

play a major part in keeping open these sea routes, for if our resolve were seen to weaken there might well develop within the United States new political pressures which would question its continued commitment to the defence of Western Europe.
The right hon. and learned Member for Hexham (Mr. Rippon) referred to the balance of forces between NATO and the Warsaw Pact. The right hon. and learned Gentleman will know that the balance is tilted against us on sea, on land and in the air. Indeed, he emphasised that imbalance. That makes it vital that we concentrate our resources where the contribution that we can make is most significant. In our view that is in Central Europe, the Eastern Atlantic and the Channel. When it comes to the Indian Ocean and the South Atlantic, it is true that the Royal Navy still retains the ability to deploy its forces, together with those of our Allies, wherever our interests might be at stake.
The critics have predictably fallen into two groups. There are those who have argued that we have not done what we set out to do in our manifesto. I must tell them that I honestly believe them to be wrong. They may not have agreed with the wording of the manifesto, but it was on that wording that we sought the confidence of the British electorate in the General Election. We said then that over a period we would achieve annual savings on defence expenditure of several hundred million pounds. That is what we have endeavoured to do. Let there be no mistake—the cuts are real and deep, as the thousands whose jobs and careers have been affected by them will testify.
I wish that some of my colleagues who signed their amendment could have gone with me and my colleagues on our visit to defence establishments and joined us in our attempts to explain all the consequences of closure. Indeed, some of my hon. Friends who signed the amendment were members of delegations which pleaded for more work even within the context of the cuts. I particularly ask my hon. Friend the Member for Preston, South (Mr. Thorne) to remember that fact.
My hon. Friend the Member for Salford, East (Mr. Allaun) referred to


the importance of defence orders for employment in industry. He attempted to argue that it was possible, and indeed easy, to replace this level of employment with civil work. He drew heavily on an article written in Tribune last week by my hon. Friend the Member for Edinburgh, Central (Mr. Cook). He said that two out of three qualified scientists and engineers in the mechanical engineering sector were employed on defence work. I find that a rather unconvincing statistic since in 1974–75, the last year for which complete figures are available, the gross output of this sector was just under £7,000 million. Defence contracts for mechanical engineering in the same period amounted to £80 million, a little over 1 per cent. of the total output. While it is probably true that defence work, because of the highly advanced technology on which it is based, takes a more than proportionate share of qualified scientists and engineers, the claim that 66 per cent. of that effort is taken up in a sector that accounts for only 1 per cent. of the work seems to be rather out of scale.
If I have one concern above all others on this front, it is that when policies for economies involving large-scale job losses in our direct sphere of Government responsibility are advocated, those who advocate them should always have positive, detailed and convincing plans for the constructive redeployment of the human resources involved.
My hon. Friend the Member for Hornchurch (Mr. Williams) was right to recognise this factor. My hon. Friend the Member for Salford, East also had something to say on that score. I was interested in his observations, but I cannot accept that defence cuts can be made without pain. I have seen too much evidence of this pain in recent weeks at first hand. As my right hon. Friend the Secretary of State for Defence said earlier today, rapid, rash and arbitrary cuts in defence expenditure of the kind my hon. Friend the Member for Salford, East would like to see could seriously aggravate unemployment in places where alternative jobs are hardest to find.
There is another point that I must put to the Government's critics. It is one thing to demand, as a matter of conscience,

that our defence system should be dismantled, but that does not seem to be their position. In their demands for cuts, there is an implied acceptance of the need for defence. The position of those who argue for cuts would be a good deal more credible if they were to deploy positive and constructive arguments about the sort of defence system they wish to see.
In an open and free society, there is a great deal of room for searching and critical analysis of the tasks and organisation of defence. My right hon. Friend has previously called for such a great debate. With him, I look forward to the day when our critics on this front are ready to join in and to make their constructive contributions.
Of course it is not possible to define, in absolute and scientific terms, precisely what is the right amount to spend on defence—or, for that matter, on any other public expenditure programme. Defence has to take its place in the battle for relative priorities. But there is—as the hon. Member for Inverness (Mr. Johnston) said, and I am sorry to see that he is not now present—a band of expenditure below which we reach a point where it will become impossible to sustain a viable defence policy. If we allowed that situation to develop, we would indeed be throwing all our money spent on defence down the drain.
The other critics have been those, led by the right hon. Member for Chesham and Amersham (Mr. Gilmour), who say the defence cuts have gone too far. It would be easy to score debating points about this kind of observation, but it is a temptation which I shall do my best to resist. My right hon. Friend reminded the House of the three ill-prepared, arbitrary cuts in defence expenditure under the Conservatives' reign. It is interesting that so frequently the people who call most loudly for cuts in public expenditure are the same as those who criticise such economies when they are made.
Hon. Members opposite criticised us after the defence review and said that we had reduced defence expenditure to a level at which our security and that of our Allies was in peril. Although the right hon. Member for Chesham and Amersham seems to be out of touch with


his principal leaders, they have seen the light and have accepted that, if ever again they were to form a Government, they would not increase defence spending above the defence review level. The right hon. Member for Chesham and Amer-sham plods his lonely way, claiming that they would strengthen defence. I cannot begin to imagine how he can reconcile those two objectives. After this first day's debate, the House is entitled to ask what is Conservative defence policy.

Mr. Ian Gilmour: I told the House earlier today what was our defence policy. What the Minister has just said is totally untrue. We never accepted the cuts made last year. We voted against them and we do not accept them now.

Mr. Judd: We are well aware of the divisions on the Benches opposite though I did not recognise that they ran to such an open challenge from the Front Bench to the words of their Leader in a television broadcast.
Those of us who study the affairs of the Conservative Party with great academic interest note that the eminent think-tank of that organisation, the Bow Group, is calling for the cancellation of the anti-submarine warfare cruiser and the multi-rôle combat aircraft. What sort of defence policy would that leave us with?
Once again, the Opposition are nagging, this time about reductions in spending which leave our NATO commitments intact—reductions in support which are a natural consequence of the economies made in the front line in the defence review. We were clear that there could be scope for further economies in this area and we said so, though the right hon. Member for Chesham and Amersham seems to have forgotten that. Are the Opposition saying that we should spend more public money on retaining facilities for which, in the end, there is no longer a defence requirement?

Mr. David Walder: Perhaps I can put the Bow Group in context for the Minister. It was only fairly recently that the Group gave a dinner at which the Leader of the Opposition was received with acclamation. I look forward to hearing from him when he receives an invitation to have dinner with the Tribune Group.

Mr. Judd: Knowing the gourmets in Tribune Group, I suspect that it would be a very good dinner. The fact that the right hon. Lady was received with acclamation by the Bow Group may have been because they thought she was going to cancel the anti-submarine warfare cruiser and the MRCA. We must judge for ourselves.
The pedlars of doom in whose eyes the Russians always appear to walk seven feet tall should recognise that, in an open and free society, the quality of our external defence arrangements cannot be separated from the quality of our national life and its economic basis. We have to have strong industry and a strong economy a social system including housing, education, care of the elderly, health services and all the other assets of civilised existence which we believe provide us with something worth defending. But there are also those more fundamental values of freedom, justice and tolerance which we neglect at our peril.
Unless we remain at least as committed to sustaining and developing these pillars of our national life, our adversaries could too easily stand by and watch as our society disintegrated from within.
There are few countries more inextricably involved in the world as a whole than ours. If we fear the spread of totalitarian Communist influence and domination we would do well to avoid those attitudes which provoke it. To some of those hon. Members opposite—I am glad to say not all—it should be said that it has been the apologists for Franco, Salazaar, Caetano and the Greek Colonels, and today the apologists for Pinochet in Chile, for racialism in South Africa and Ian Smith in Rhodesia, who have spurred on the spread of Communist influence. It is these apologists, by their failure to make the same uncompromising stand against the ruthless policies and practices of the extreme Right as they make against those of the extreme Left, who provoke an idealogical confrontation, who are paradoxically the very allies sought by Moscow. The founders of the NATO Alliance have no doubt that it is was an initiative to defend the values of Western civilisation. In our support for NATO today we must never forget exactly what that means.
Some of the specific points raised in the debate today will be fully answered tomorrow by my right hon. Friend and by my hon. Friend the Under-Secretary of State for Defence for the Royal Air Force, but I should like to comment on one or two matters. The hon. Member for Ayr (Mr. Younger) challenged the White Paper for using the gross national product as the yardstick for defence spending. He must learn to accept that all members of NATO share their interest in defence.

Mr. Buck: Before the Minister goes on to the specific points, which I am sure he will deal with meticulously, may I put this to him? He spoke of the menace from the East and went on to refer to the menace from Right-wing elements. We all agree that there could be a danger there, but at present, does not the hon. Gentleman agree that there is no vast Fascist power dominating the world scene? Let us all be vigilant to see that none arises. Should not the hon. Gentleman turn his attention to the passage in the White Paper which so graphically draws attention to the fact that the West ignores, which is that during the last year the military capability of the Warsaw Pact countries has increased in number and quality? Is not that the danger.

Mr. Judd: I am grateful to the hon. and learned Gentleman for his lengthy intervention. He missed the point. I was stressing that because of the size of the threat we face, we should be at pains not to play into the hands of those other forces in the world in a way which will lead to the polarisation of events in Latin America or South Africa.
The hon. Member for Ayr has to learn to accept that members of NATO share their interest in defence, and it is right that they should all make a fitting contribution to the cost of common defence. Has he not heard the phrase "Each according to his needs"
When we came to office we were spending more than we could afford on defence and more, proportionately, than our major European NATO Allies. We can all make play with selected statistics. What we have to remember is that they relate to a programme of men and materials, to a pattern of employment and

to a purpose in maintaining security. It is legitimate to look at what other people are doing.
Despite the hundreds of millions of pounds we have saved by the reduction in the share of resources, I am not primarily interested in the statistical defence of our policies. I am not concerned primarily about any statistical attack on them. As a Government we stand on our record of achieving a balance between commitments and resources in the interests of this country within the Alliance. That is, above all, what matters.
On the nuclear deterrent, my hon. Friend the Member for Salford, East accused us of semantic juggling. I repeat for his benefit that the Government have renounced any intention of moving towards a new generation of nuclear weapons. However, as has been explained on many occasions in this House, and is repeated in the latest Defence White Paper, we are maintaining the effectiveness of Polaris.

Mr. Frank Allaun: If no improvement in our nuclear weapons is to take place, why on earth are we to have another nuclear test underground in the United States this year?

Mr. Judd: We have said that we shall take whatever steps are necessary to maintain its effectiveness.
The right hon. Member for Chesham and Amersham compared the Mediterranean with the China Sea in speaking of the Navy. We do not underestimate the importance of the southern flank, no more than of the northern, but we believe that we can make a greater contribution to the Alliance by concentrating our defence effort on other areas. We are not, however, neglecting the southern flank, and the right hon. Gentleman himself recognised that we announced in the defence White Paper new measures to improve our involvement there.
As for the northern flank, its importance to the Alliance is obvious. We showed our recognition of this when we announced in this year's defence White Paper our proposals for additional Royal Marine Commando forces to be trained and equipped for operations in Norway.

Mr. Trotter: Does the Minister accept that these new reinforcements for the southern flank are no greater than our


previous commitments and that exactly the same applies in the north? Those are existing commitments that we are continuing.

Mr. Judd: We are at pains to consult fully with our Allies. It was as a result of the consultations with our Allies that these measures were taken. They were measures which they regarded as important for us to take.
The hon. Member for Ayr also referred to supposed inadequacies in the British Army of the Rhine. BAOR is to be reorganised, with new-style divisions, in a way intended to reduce the manpower in the chain of command and to reduce the number of basic company size combat teams. This is a complex reorganisation involving a series of moves of men and equipment, and it is being subjected to extensive trials. These are still in progress and we cannot prejudge the outcome. But we are alert to the need to make adjustments where the trials suggest that this might be desirable.
The right hon. Member for Brighton, Pavilion (Mr. Amery) dwelt at great length on the affairs of Southern Africa and, in his usual courteous way, informed me that he could not be here for the winding up. Most of what the right hon. Gentleman said was more for the ears of my right hon. Friend the Foreign Secretary.
We have made it quite clear that we deplore all outside intervention and interference in the internal affairs of Angola. I remind the right hon. Gentleman, however, that the United Kingdom can no longer afford to act as the world's policeman, nor do we believe that our long-term relations with the emergent countries of Africa would be best served by military intervention in their areas.
There has been reference to Hong Kong. I remind the House that we maintain a garrison in Hong Kong in support of our responsibilities for the external defence of the Colony. We do not pretend that the garrison could deal with a full-size Chinese attack, but we cannot shirk our responsibilities for the internal security of Hong Kong or the confidence derived from the presence of the garrison We have, however—my right hon. Friend will have more to say about this tomorrow—concluded an agreement with the Hong Kong Government which will

involve a much higher contribution from them towards the cost.
My hon. Friend the Member for Huddersfield, East (Mr. Mallalieu) suggested that we might leapfrog in introducing new generations of equipment. Of course, we ensure that new equipment coming into service represents a distinct improvement over that which it replaces, but modern sophisticated equipment takes a long time to develop and to bring into service, and a conscious decision not to introduce replacements could involve risks that we would not wish to take.
The hon. Member for Ayr also asked about supplies and in particular about fuel supplies. I can assure him that the limitations imposed by recent cuts in fuel allocations will have no effect on training programmes, apart from marginal implications for Fleet exercises and deployments which will not affect operational efficiency.
My hon. Friend the Member for Huddersfield, East, in a very interesting speech, suggested the setting up of a specially created command to deal with the defence of our offshore resources. I am grateful to my Friend for his suggestion. He has, of course, a great deal of experience in these matters but, as he will, of course, be aware, the defence of our offshore oil and gas installations in war time forms part of overall NATO plans. In peace time it falls within the area of a single command—that of Flag Officer Scotland and Northern Ireland and his Royal Air Force counterpart. The operational focus in his headquarters at Pitreavie, and the whole range of duties carried out by the Armed Services is directed from there.
My hon. Friend the Member for West Lothian (Mr. Dalyell) expressed considerable concern about the concept of separate Armed Forces in England, Scotland and Wales. He called for a paper setting out the cost of such an arrangement. Much of what he said was of wider significance, and I regret that I cannot cover tonight all the points that he made. In any event, many of them were matters for others of my right hon. Friends. However, I can assure him that we have no plans for separate forces of this kind. Quite apart from the immense costs involved, the key to effective defence at economic cost is greater integration and rationalisation.

Mr. Dalyell: I did not expect my hon. Friend to be able to deal with all those points tonight. However, I specifically asked the Ministry to set out in full detail, so that Scottish electors could understand, what was at stake. Will the Ministry be bothered to do this? If not, we shall go on and on until it produces the facts.

Mr. Judd: I have the immediate and ready assurance of my right hon. Friend the Secretary of State that all the points made by my hon. Friend the Member for West Lothian will be given the fullest consideration and that we shall certainly seek an appropriate way to make our findings available to the wider public.

Dr. M. S. Miller: Will my hon. Friend also ensure that the United Kingdom Government or, if there is to be a separate Scotland, the English Government will not be protecting the oil rigs off the coast of Scotland at no cost to the Scottish people?

Mr. Judd: That was a point raised by my hon. Friend the Member for West Lothian, and it will be covered by our paper.
It would be remiss of me not to place on record my admiration, which I share with all my colleagues at the Ministry of Defence, for the outstanding professionalism and loyalty shown by Service men and women and by the countless civilians working directly and indirectly for our defence programme. I said in my opening remarks that NATO's strategy was based on flexible response. But it is also based on dynamic integration. We can no longer afford to look at individual aspects of the defence system in isolation. There is no longer an individual role for the navies, the air forces and the

armies of the Alliance. They are essentially all part of our closely interrelated defence structure.
Of course, the Services are right to continue to be proud of their respective loyalties. But in the many visits to defence establishments which I have been able to make as Minister, one of the most encouraging features has been the degree to which, amongst Service men and women involved in practical operational tasks, the understanding of Service interdependence is so deep and firm. If I were asked to pick one priority on which I believe we have increasingly to concentrate, it is to build on this inter-Service co-operation and to evolve still further a closely-knit defence system which, while continuing the finest traditions of the past, will set standards for the future of which we can legitimately be proud.
Those who argue that defence should bear the brunt of further economies should remember that, taking into account the defence review savings, the defence budget will be reduced, in 1979–80 for example, by 15 per cent., compared with the programme which we inherited two years ago. This is far more than any other public expenditure programme has had to bear. By 1979–80, the annual saving will be £929 million. But, within this reduced budget, we have thrown off the shackles of an out-dated defence policy. Our modern and effective forces are in future to be concentrated where it matters most—in the NATO area. The role is clear, and so is our determination to see it through.

Debate adjourned.—[Mr. Stoddart.]

Debate to be resumed tomorrow.

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the Rating (Caranvan Sites) [Lords] may be proceeded with, though opposed, until any hour and the Motion relating to the Fiduciary Note Issue (Extension of Period) Order 1976 may be proceeded with, though opposed, until half-past Eleven o'clock or one and a half hours after it has been entered upon, whichever is the later.—[Mr. Stoddart.]

Orders of the Day — RATING (CARAVAN SITES) BILL [LORDS]

As amended (in the Standing Committee), further considered.

New Clause 1

INFORMATION FOR CARAVANNERS ABOUT RATING OF CARAVAN SITES MENTIONED IN SECTION 1.

(1) Where the valuation officer alters the valuation list under section 1(1) above so as to include an area of a caravan site as a single hereditament, he shall send to the site operator and to each occupier of a pitch for a leisure caravan within the area so included, a notice containing the following information—

(a) the name and location of the caravan site on which the pitch is situated;
(b) a statement that the valuation officer is treating an area of the caravan site including the pitch as a single unit in the occupation of the site operator;
(c) the number of such pitches which the valuation officer is including in the said single unit;
(d) the amount of the rateable value of the said single unit which the valuation officer attributes to such pitches; and
(e) the rate in the pound at which the general rate for the rating area is charged under the General Rate Act 1967 in respect of the first year in which the site and pitches thereon are assessed as a single unit.

(2) If so requested before the 1st April after the making of the proposal for the alteration of the valuation list under section 1(1) above, by a person occupying any such pitch as aforesaid at the time when the proposal is made, the valuation officer shall give him in writing the information required by subsection (1) above to be given by a notice under that subsection.—[Mr. Wyn Roberts.]

Brought up, and read the First time.

Question proposed, That the clause be read a Second time.

Mr. Speaker: We have already had a good bite at this cherry. With new Clause 1 we may discuss the following:

New Clause 2

SITE NOTICES

'(1) Where the valuation officer alters the valuation list under section 1(1) of this Act so as to include an area of a caravan site as a single hereditament, he shall send to the site operator and to each occupier of a pitch for a leisure caravan within the area so included, a notice containing the following information—

(a) the name and location of the caravan site on which the pitch is situated;
(b) a statement that the valuation officer is treating an area of the caravan site including the pitch as a single unit in the occupation of the site operator;
(c) the number, subject to subsection (3) below, of such pitches which the valuation officer is including in the said single unit; and
(d) the amount of the rateable value of the said single unit which the valuation officer attributes to such pitches.

(2) The notice shall make specific reference to the fact that information regarding the rate in the pound at which the general rate for the rating area is charged under the General Rate Act 1967 in respect of the rating year then current in which the site and pitches thereon are assessed as a single unit is available from the offices of the relevant local authority, whose address, telephone number and the name of the chief financial officer shall be given in the notice.

(3) Unless the site operator specifically requests the contrary, the information to be provided by the valuation officer need not make any reference to, or give details of, any pitches for leisure caravans which the site operator retains in his ownership for letting.

(4) If so requested before the 1st April after the making of the proposal for the alteration of the valuation list under section 1(1) above, a person occupying any such pitch as aforesaid at the time when the proposal is made, the valuation officer shall give him in writing the information required by subsection (1) above to be given by notice under that subsection.'

Amendment No. 6, in page 3, line 10, leave out Clause 2.

Government Amendments Nos. 7, 8, 9 and 10.

10.2 p.m.

Mr. Wyn Roberts: When we discussed new Clause 1 on Monday, the question, "That the clause be read a Second time", was not decided by the 100th Division of this Session since there were fewer than 40 Members present.
I do not intend to rehearse all the arguments which I deployed in favour of the new clause on Monday. In it and the related Amendment No. 6 we are seeking to dislodge from the Bill the existing Clause 2 and to replace it with a clause similar to the Scottish Clause 4, which lays the onus for providing information on the assessor rather than the site operator.
We have had the benefit of the Under-Secretary of State's criticism of the new clause. Some of this criticism we accept as valid and we have sought to introduce appropriate amendments. I believe the Minister will accept that, true to Conservative tradition, we have widened his choice considerably in a very short space of time. My hon. Friend the Member for Melton (Mr. Latham) has gone so far as to introduce an entirely new clause which I hope he will have an opportunity of commending to the House. That also seeks to meet some of the Minister's criticisms. I would not be surprised if the Minister preferred new Clause 2 as the lesser of two evils as far as he is concerned.
I must stress that the essential difference between us and the Government is that we believe that the duty of supplying information should be laid on the valuation officer rather than the site operator. The information required has to do with rateable values and the Government cannot deny that the authoritative source of such information is the valuation officer. Therefore, it is up to him to provide, and to provide directly, such information to those requiring it. We accept that the valuation officer is not the authoritative source of information about rate poundage so we are prepared to delete subsection 1(e).
Unlike the valuation officer, the Scottish assessor is, I understand, primarily a local authority official. It is appropriate that he should convey rate poundage information, whereas it is inappropriate that the valuation officer should do so. We do not consider it

necessary to burden the local authority with the provision of this information at all, other than by its normal provision of it through the local Press.
Rate poundage is common and general knowledge and we do not think it necessary to disseminate it on an individual basis to caravanners. My hon. Friends and I consider that it is important that the rateable value of each pitch should be known to individual caravanners. We made the point in Committee, and it was made again during the debate on Monday evening by many of my hon. Friends, that unless individual caravanners know their individual rateable values they will not know whether to go for separate assessment under Clause 1(7).
The Government are adamant that all that needs to be provided is average rateable value, but we are dealing with a great many caravanners who have been saparately assessed for this last year and they will wish to compare like with like. During the Second Reading debate the Under-Secretary of State told us:
Most leisure caravans have been separately assessed."—[Official Report, 3rd March 1976; Vol. 906, c. 1327.]
These people will not be content with average rateable values which are not strictly comparable with the rateable values they already have.
I readily admit that the Government have a very difficult problem here. I do not want to sound dogmatic about our proposed solutions. I can see that the Government's solution will lead to endless requests for separate assessments. Consider the caravanner who has been separately assessed this year and who knows what rates he has to pay. In future he will get the average rateable value of his pitch on a mixed hereditament basis and his rate payment will be buried in the site charge. He will go straight to the site operator and press him to reveal the amount of his rate burden and how it was calculated. I would be very surprised if that conversation ended amicably. The rows have already broken out. I am sure that they will continue until we get a satisfactory answer.

Mr. Phillip Whitehead: Would the hon. Gentleman agree that the situation now is that many of the caravan owners, rightly or wrongly, have


such reservations about the Bill that they are saying, in my view wrongly, that they would prefer another year on individual rating? That at least would give them an opportunity, through the valuation appeal procedure, of fighting their case.

Mr. Roberts: I am sure the hon. Gentleman is right that there are many caravanners who would like to continue with the separate assessment.
We have also sought to meet the Government's criticism that the new clause provided only for a single year by adopting the Government's Amendment No. 8. We have tried to sweeten the Minister still further by accepting that the site officer shall in future display notices of changes.
I realise that not all of our suggested changes are as consistent as we would wish. I hope that the Minister will not waste his time and that of the House in pointing that out to us. What we have tried to do is present the Under-Secretary with a wide range of choices and to encourage him to move away from Clause 2 as it stands, even with the new Government amendments. We also hope that their Lordships, to whom the Bill will have to return, will have more time than we have had to consider some of our suggestions and misgivings about this part of the Bill. Those misgivings are fully justified because what the Government propose to do is to foist the valuation officers' problems and the problems of the local authorities on the site operators. We do not think that this is fair to the site operators or conducive to justice being done to the individual caravanner.

Mr. Michael Latham: I am grateful for the chance of saying a few words about new Clause 2 standing in my name and that of my hon. Friend the Member for Conway (Mr. Roberts). This clause was tabled subsequent to our discussions on Monday night which were interrupted by the decision of the House. One of the results of that decision, that the debate should stand adjourned, was that we were given a chance—which we do not often have on Report—to consider what the Minister had said about the form of our amendments, to take that into account, to make alterations and to table them once again. New Clause 2 reflects this.
If I had to take a single text in discussing this matter it would be that used by the Under-Secretary during our proceedings on the last occasion when, talking about the famous judgment of the High Court in the Field Place caravan site case, which is the basis of the whole of this Bill, he said:
The High Court makes some strange decisions, and this one was very strange."—[Official Report, 29th March 1976; Vol. 908, c. 1057.]
We are dealing on the basis of a strange decision which the Government have decided not to overturn but to implement in a rather different way. So be it. I do not agree with that, but that is the Government's intention.
In dealing with the new clause moved by my hon. Friend the Member for Conway on Monday evening the Minister brought forward three specific criticisms to be found at columns 1060 and 1061 of our proceedings. The first criticism was that the new clause, in the form in which we had originally moved it, gave to the valuation officer a duty of communicating to the site operator the rateable value of the caravans which the site operator was renting as opposed to those which were on the site, owned by other people on the normal basis.
To meet that point, subsection (3) of my proposed new clause says:
Unless the site operator specifically requests the contrary, the information to be provided by the valuation officer need not make any reference to, or give details of, any pitches for leisure caravans which the site operator retains in his ownership for letting.
That subsection exactly meets the point made by the Under-Secretary on Monday and we can therefore dispose of that objection.
I have also tried to deal with his second objection when he said,
The information that it seeks to provide will be less useful than under the present Clause 2 because it will include information on the site operator's caravans, and that is no use at all to the caravan owner himself.
I have tried to deal with that. The Under-Secretary went on to say that it
makes no provision for giving any information to the caravanner after the first year."—[Official Report, 29th March 1976; Vol. 908, c. 1061.]
The hon. Gentleman will notice that I have deliberately dealt with that problem


in subsection (2) when I deal with information
in respect of the rating year then current". That exactly meets the point.
The other criticism of new Clause 1 as originally moved on Monday by my hon. Friend the Member for Conway was that it required a valuation officer under paragraph (e) to provide information about the rate in the pound. The Minister pointed out that that was not of interest to the valuation officer because in England he was an official of the Inland Revenue as opposed in Scotland to an official of the local authority. Obviously the valuation officer has no concern with the rate in the pound. That seemed germane. Therefore in subsection (2) I have suggested:
The notice shall make specific reference to the fact that information regarding the rate in the pound at which the general rate for the rating area ies charged … is available from the offices of the relevant local authority, whose address, telephone number and the name of the chief financial officer shall be given in the notice.
If a caravan owner wants information about the rates in the pound in an area where he is holidaying, which will probably not be his own local authority area, he will know where to go.
In redrafting the new clause and in giving it a new title—"Site Notices" instead of "Information for Caravanners"—I have gone a considerable way towards meeting the Under-Secretary's objection. We put the clause down yesterday. But because we are discussing matters which were not then recorded in the Official Report, as the debate on Monday took place after 10 o'clock at night, I missed one of the points made by the Minister about a notice of deletion under Section 3(3) of the Local Government (Scotland) Act. It was reasonable argument and if the Government wish to meet that difficulty by a manuscript amendment to my new clause, I shall consider it favourably. But I have not yet had an approach from the Under-Secretary.
I turn to Government Amendments Nos. 7 to 10. Having now read what the Under-Secretary said on Monday, I have a number of questions about the wording of these amendments. It would have been more convenient if he had moved amendments to take out the whole of subsections (2), (3) and (4) of

Clause 2 and put down the whole of the new wording by amendment. The Minister's amendments to subsections (2), (3) and (4) are so drastic as to make it extremely difficult to read the clause as it is to stand in its amended form. I have puzzled over it all day and I think that by dint of the use of many brackets and crossings-out I have it right. But the drafting is detailed, and it would have been easier for the House to understand the clause if there had been three new subsections.
10.15 p.m.
In Government Amendment No. 7 the expression
from the beginning of April to the end of October
is used. That is an improvement on the previous wording
between the beginning of April and the end of September",
but it is not as good as
until the beginning of November",
used in the old version of subsection (3). It would be useful if the Under-Secretary would explain why that wording was chosen and whether he is satisfied that no caravan sites are open after the end of October. It could be a matter of some importance in, for example, ski-ing areas.
The matter was raised in Committee, and the Government have had a chance to consider it. I think that it was I who first suggested to the Minister on Second Reading that it was useless to have a notice posted on the site at a time when people were not there. The Government have introduced the amendment to try to meet that point, but I am not satisfied that they have dealt with the whole problem.
What is the meaning of the words in brackets in Amendment No. 7:
but starting with the April following the receipt of the notice under subsection (1), if it is received in October"?
If the notice is received in October, why should one have to wait until the following April for its contents to become relevant? Why cannot it immediately reflect in October the situation then? The words in brackets were presumably included for a reason.
I come next to Government Amendment No. 8. I have some difficulty in establishing exactly what the duty of the site operator is supposed to be. It is not


proposed to amend Clause 2(1) as far as I know. The impression is given that it is the site operator's duty to put on the board certain information including under subsection 2(a)
the facts stated in the notice under subsection (1)
—not the notice received from the local authority but the facts stated in it. The site operator is presumably to transcribe them because, under Amendment No. 8, information is to be given which is to take the place of the notice under subsection (1).
Would it be in order for the site operator to pin up the notice which he receives from the valuation officer, rather than having to transcribe it? I am glad to see the Minister nodding agreement. No doubt he will wish to confirm it for the record. This is a matter of considerable importance to the site operator.
I turn to subsection (3), that part which it is not proposed to redraft, which says
The notice … shall be displayed at some conspicuous place".
There are important considerations here. For example, what happens if the notice s blown down? This is not a frivolous point. We are talking about open-air caravan sites and a notice of great importance both to the caravan owners and the site operator. We wish to know whether it is supposed to be a "conspicuous place" outside or inside. Clearly, a notice which is up for a day, is blown down by strong Lincolnshire winds and is not replaced by the site operator, is a poor remedy for the caravan owner. The Minister might wish to consider whether "conspicuous place" should be an inside place. I am tempted to suggest a toilet, where the people on the site are certain to want to go at some time in their holiday.
Amendments Nos. 9 and 10 re-draft the whole of subsection (4). I find this extremely difficult to understand and extremely impeding. As I understand the proposed redrafting subsection (4) will read,
If so requested by a person occupying any such pitch as aforesaid the site operator shall give him in writing the information required by subsection (2) above to be given by a notice under that subsection as the subsection would apply at the time for a request if a notice were required to be displayed at all times after receipt of a notice under subsection

(1) and to take account of any notice received under subsection (2A).
I understand those to be the re-drafted words which will be inserted in this Bill if the Under-Secretary's amendments find favour with the House.
I simply want to ask what does that provision mean and who is supposed to be able to understand it? Hon. Members, whether they have been involved with the Bill in Standing Committee, or whether they have been involved with it since it came back to the Floor of the House, wrestle with the words of the Bill and try to understand what they mean. But we are dealing in most cases with caravanners, people of very modest means, whose caravan is the only luxury they have. It is a very important possession for them, and that is why hon. Members such as myself have been very disturbed by the effect of this Bill. In many cases these people do not have a powerful organisation to act for them. They have groups or associations, not with full-time paid officials, but with voluntary workers working on behalf of those ordinary caravan owners. How they are expected to be able to understand the rewording of this Bill and to give advice to their caravan owners about what exactly is involved is very difficult for me to see.
There are references to all sorts of notices in the new drafted subsection (4) and it will be hard for anyone except an expert to understand it. What guidance will be given? The Minister may say that there will be a circular to local authorities, but who will read that other than the rating officer or the treasurer of the local authority? How many caravan owners will know their rights? In particular, how many caravan owners will be able to know whether it is in their interests to make an application for individual assessments? This is very much at the core of the Bill.
When we are discussing this matter in Standing Committee and talking about Clause 1 the Minister described what would happen when a proposal is made and whether, if someone challenges the assessment, he will be deleted immediately from the site assessment and have the chance to be reinstated later.
In column 35 of Hansard of our Standing Committee on 16th March I


suggested to the Minister that this was an unsatisfactory situation which needed to be looked at again. The Minister was courteous enough to write to me on 25th March, when he said:
Even though their previous separate assessment may have been deleted this does not in any way affect their right to a separate assessment under the new system, nor does it affect the procedure which they would have to go through in opting for a separate assessment…in most cases the financial advantages to caravanners from being in a composite site assessment will be such that it will not be worth their while seeking a separate assessment. In these cases where the caravanners may not realise this and opt for a separate assessment. Valuation officers will almost certainly draw this to their attention when discussing the proposal and it is expected that many will then decide not to go for a separate assessment.
A number of basic questions occur to me from reading that letter. For example, how does the Minister know that it will not be worth their while to seek a separate assessment? We have had no information about the differences between rates assessed individually or on a site basis. No one knows. Some caravanners in my constituency have negotiated a 10 per cent. to 15 per cent. reduction in the rates on which they have so far been assessed. The valuation officer and the local authority have admitted that they had no idea of the rateable value of a holiday caravan and that the previous estimates could only have been figures plucked out of the air. At my surgery last Saturday a constituent said, "I am worried that if site assessment is forced on us, the reduction we have negotiated after very hard work may be lost."
The Minister says that valuation officers will almost certainly draw this provision to the attention of caravanners. But what worries us is that the valuation officers may say to caravanners, "Under no circumstances must you exercise your rights under Clause 1(7). You are much better off under site assessment. Do not waste our time and cause trouble. Accept site assessment and we shall all be much happier." Rights are provided in this way, presumably, so that people may have the opportunity to exercise them.
Words like those in the Minister's letter—however courteous—confirm my suspicions

that the object of the exercise is to ensure that people do not exercise their rights, that they accept site assessment and everyone lives happily ever afterwards. Caravanners are not living happily ever afterwards. There is great feeling in Leicestershire over this matter.
The House was right not to come to a decision on this matter on Monday. The Minister did not give an adequate description of his amendments. Perhaps he will feel able to do so tonight, and to answer the points I have put to him, on which he is doubtless receiving information from his officials.

Mr. David Mudd: I wholeheartedly support new Clause 2. It seems that my hon. Friends listened carefully to the Under-Secretary's careful and educative remarks on Monday and have tried to accommodate his philosophy.
New Clause 2 seeks to do away with subsection (5) of the existing Clause 2, which has been consistently overlooked by Ministers. It refers to a penalty of £50 in the event of a site operator failing to furnish details, having received a written request. In Committee on 18th March, my hon. Friend the Member for Conway (Mr. Roberts) said that that must be the first time that failure to answer a letter had been made a criminal offence.
Why the miraculous figure of £50? Perhaps the Government have looked into their crystal ball and seen two certain effects of inflation—to minimise the effect of fines and to increase postage rates. Perhaps they believe that it will be cheaper in two years to pay a £50 fine than to pay the postage on a statutory letter. Throughout our proceedings, the Government have refused to comment on this provision.
The Government were asked in the other place on 5th February, as reported at column 1474, within what period the retrospective questioning of an assessment could arise. The point was made that persistent caravan owners could well raise this point three years after the reassessment. Baroness Birk gave the impression that this situation would arise only in the first year of the new system. I hope therefore that the Minister will deal with these points.

10.30 p.m.

Mr. Jim Lester: My hon. Friend the Member for Melton (Mr. Latham) is to be congratulated on his new clause, which owes its refinements to the discussion we had on Monday. My hon. Friend has been genuinely trying to meet the wishes of the caravanners and the site owners, as the Minister said on Monday. None of us is trying to do other than be helpful and introduce some sense of reason into this difficult matter.
The Minister said that he had practical experience of caravanning on Anglesey, but those who know the East Coast wonder how many sites have been visited by ministerial advisers in the course of drafting the Bill. Perhaps I should declare an interest in that at an early age I sold holiday footwear all round that coast, and there are few sites of which I have not had experience. There is a considerable difference between the sites of the West Coast and those on the East Coast.
It would help to reduce the sense of conflict which is being generated between caravan owners and site operators and caravan owners and the Government for the Minister to visit the caravanners who feel that the Government are determined to push the legislation through against their interests. The visit should be made at Easter when many people make the first trip of the year to their caravans. Many of these people would welcome a discussion to clear the air.
It is insufficent simply to have a notice on the site, in spite of the £50 fine. With crowds of people on a site, all busying themselves with their activities, one formal notice pinned to a board or a tree is not enough. That is not the way to inform people of the serious financial commitment they may be entering into. One worrying facet of this matter is that some site owners are already extracting cash from caravanners in anticipation of site valuation. Caravanning is often the one relief and joy in life for the caravan owners. This proposal is a real worry to them. On Monday the Minister accepted that we were trying to alleviate that worry. We are trying to be as helpful as possible.
Some site have between 200 and 400 caravans on them. Indeed, there is one at Yarmouth with 1,200 caravans. A simple notice posted on such a site is not

the way to inform owners of their financial commitment.
At Easter weekend many people will be milling about and having meetings to try to find out what the situation is. The site owner will probably say "I have posted the notice." The caravanner might say "I have not seen it. I have not been able to understand or assess it."
We want to see the situation envisaged in new Clause 2 where if it cannot be done by Easter, at least people will be able to see that the mechanics exist. That will cool the temperature, because they will know that they will be treated fairly. They will know that in time, before they have to pay anything, they will have fair assessments, because every caravan owner on a site will be informed of his position.
It is difficult to interpret what the Minister said on Monday. The hon. Gentleman referred to somebody who collects rates because a valuation officer has said "This site is worth £10,000 and that can be divided by the number of caravans to get the average per pitch." That seems different from the valuation officer saying "This site is worth £10,000 and we shall notify each site owner of his commitment." That, in the Minister's mind, seems to be the difference between a collector of rates and a ratepayer. I submit that it is a very narrow point.
We are trying to ensure that those who pay the rates are satisfied that they are fair. Of course, they will never be totally satisfied, because they do not believe they should pay this kind of rate. Many of us believe that it is erroneous to equate the holiday cottage with the caravan. We want to satisfy those who have to pay this money that what they are called upon to pay is fair compared with fellow site renters and we have to protect them against any malpractices by site operators.
With the benefit of hindsight and the amount of thought that we have put into new Clause 2, I should have thought that the Minister would readily accept that we are genuinely trying to help the Government to get out of the awkward situation in which they find themselves. We are against the pressure for this date. Many people will be seriously affected. I hope that, in the reasonable way in which the Minister usually replies to these debates, he will accept new Clause 2.

Mr. John Cope: I have not played a big part in


these debates so far. That seems all the more reason why I should intervene at this stage.
These new clauses, in particular, deal with site notices. My hon. Friend the Member for Melton (Mr. Latham) went to the heart of the philosophy underlying the new clauses when he talked about the valuation and the fact that none of us knows whether the valuation will be greater or less under the new arrangements proposed in the Bill as a whole.
The site notice will not matter at all if the valuation, when it comes out, is the same for the site as a whole, including all the individual caravans on it, as the sum of the caravans on the site. If that is so, the notices will not matter in the least. The money collected from the site owner will be passed on in charges to the caravanners. It will become part of the site charge which is collected in one parcel from the site owner instead of from the individual caravanners. In that case, therefore, the notice on the site will not make much difference to the caravanner. He may feel that he is totally out of the picture and does not understand what is going on. He may need the matter explained to him a little more. But it will not make any financial difference to him.
Where the matter starts to make a financial difference to the caravanner and where the notice starts to be of real importance to him is if the valuation of the site as a whole, the single hereditament valuation which is provided for in the Bill, turns out to be greater than the sum of the individual valuations of the individual sites which would otherwise be levied on the individual caravanners.
There is no doubt that the total single hereditament valuation will be greater than the sum of the individual valuations. After all, that is normally the case when one is talking about a number of individual parts of a set. If one takes a set of almost anything, one finds that the valuation of the individual parts added together does not come to the same amount as the valuation of the set as a whole. This is recognised not only by valuers in valuing various things, whether in the antique market, in parcels of land, or in parts of many different things. It is recognised throughout the valuation of almost any type of goods that a collection

of something is worth more than the individual bits put together.
That brings me to the heart of the Bill and the nub of the new clauses and the amendments, and the matters at which they are aimed. One can follow this argument through by looking at all kinds of other examples. I do not want to weary the House by pursuing it into a very large number of things, but if the Government doubt in any way that what I say is correct, they have only to look at the tax laws to see that a large parcel, particularly a controlling parcel, of shares, for example, under the estate duty legislation, is of a considerably greater valuation than individual shares not amounting to control. Under estate duty the same applies to small areas of land. If these are put together into a larger area there is a much larger valuation than the mere sum of the individual bits.
That is the philosophy behind those who have been anxious in the past and, indeed, remain anxious to try to increase their wealth by assembling parcels of land, shares or other assets into sets in order to increase the value. They realise that they can buy the individual pieces and that when they have done that, the set will be worth more than they have paid for the individual pieces, even if the value of the pieces has not altered.
I think that estate duty was introduced in 1894, although it may go back earlier than that. It has long been recognised by Governments that a set of items, even if they are identical items, must have a value greater than that of the individual parts of it. That being so, it becomes very important that the site notice that is displayed is clear and understandable and that the caravanners appreciate the nature of what is being done when there is application for a single hereditament valuation. When they appreciate that, they will realise that this is a device which increases their rates, and that it is not the other way around. The supposition that is generally being put about at present is that it is likely to decrease their rates.
That is why the new clauses and the points made by my hon. Friend the Member for Melton go to the heart of the Bill. As a result of these considerations and as a result of listening to my hon. Friend the Member for Melton, I have become deeply suspicious of the Bill


as a whole and of the purposes which lie behind it.
10.45 p.m.
The Bill attracted my support in the first place as it appeared to be a means of simplifying administration. However, when we consider the displaying of site notices, when we consider the information that will be displayed on them, whether they are displayed in lavatories or on a tree, we begin to appreciate that the Bill has a character that we did not appreciate at first instance.
If the Bill is not to lead to a simplification of administrative arrangements, with the savings to go to the local authorities or to be shared between the cara-vanners, the site owners and the local authorities, and if the effect will be to increase rates, this measure takes on a different complexion. It seems that the site notices for which the Bill provides have taken on a different importance from what was suspected in the first place.
I have a specific question to put to the Minister. It is a question that may have been answered in Committee but I do not think it has been answered in the House on Report. I do not understand why in Amendments Nos. 7 and 8 so much excitement is attached to October. If a notice is received in October all manner of different things start to happen. If a notice is received on 1st November, or later in November, I cannot see why it should be treated differently from a notice that is received during October. It seems from my reading of the Bill that September creates a slightly different situation.
What is the difference between 1st November and 31st October? I know that there is the difference of one day, but it seems that the definition "in October" is a little more precise than is justified. There may be some point attaching to October which escaped me on reading the Bill. I am not a lawyer and I am sure you will agree, Mr. Deputy Speaker, that it is sometimes difficult to see through all the complexities of legislation of this sort. However, I wish to try to see through the drafting complexities and to ascertain what the effect will be when the site notice is displayed in the lavatory.
I return to my original point, which I think is essential to the Bill and the new clauses. The valuation of the individual parts is bound to be less than the value of the site as a whole.

The Under-Secretary of State for the Environment (Mr. Gordon Oakes): First, I must make a confession. I must be one of the most disingenuous Members in the House. On Monday Opposition Members paid tribute to the Government for introducing a Bill which will be of assistance to caravanners. However, they thought that they had a clause which would make it better, and I believed them.
The hon. Member for Falmouth and Camborne (Mr. Mudd) has said that I made a courteous and educative speech. I hope that it was. I always try to be courteous and educative. I tried to point out how the clause was not as good as the existing clauses. But what happened? Hon. Gentlemen, who were said to be pleading the cause of caravanners in this House, tried by a procedural device to lose the Bill altogether. That is their concern for caravanners.

Mr. Michael Morris: Mr. Michael Morris (Northampton, South) rose—

Mr. Oakes: No, I will not give way. I acquit two hon. Members of that charge. I refer to the hon. Member for Falmouth and Camborne (Mr. Mudd), who voted in favour of what he believed, as he is fully entitled to do, and my hon. Friend the Member for Derby, North (Mr. Whitehead), who also voted. The rest of them—including, I am ashamed to say, hon. Members on the Front Bench despite an agreement between the usual channels—tried to get the Bill lost.

Mr. Michael Morris: Will the Minister bear in mind the fact that, through the usual channels, his hon. Friends were duly warned that the Opposition Front Bench were happy to assist the Government, but adequate warning was given that there were Opposition Members who had great reservations about the Bill? It was the Government's fault that they sent people home to bed because they were too tired to stay here and listen.

Mr. Oakes: Then I must have misread the Division lists. Indeed, those lists must be wrong. The hon. Members for Northampton, South (Mr. Morris) and


Conway (Mr. Roberts) were not down on that Division list as voting on the issue.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. I think it might be wise to return to the discussion of the clause.

Mr. Oakes: I am discussing the clause. Opposition Members said that I was courteous and educative. I deplore duplicity in this House, and there was nothing but duplicity on Monday night.
Let me return to the serious business of helping caravanners. Hon. Members seem to be worried about two aspects of this clause—first, the kind of information which caravanners are to be given and, secondly, the method by which this information is to be given to them.
On Monday night unfavourable comparisons were made between the English and Welsh Clause 2 and the Scottish Clause 4. So far as the kind of information is concerned, the two clauses are virtually identical, although an amendment I shall move later adds to the information given in England and Wales. So far as the method is concerned, as I said on Monday night, the Scottish rating system lends itself to the system whereby caravanners are notified directly by the assessor of the total rateable value of the separately assessed caravans and their number, whereas in England and Wales our system does not.
Let me now turn to more specific points. The Opposition have said that they wish to extend the kind of information provided by the valuation officer and require him to apportion the rateable value for the whole site to each individual pitch. If this were done, it would lead to a great deal of work for valuation officers in England and Wales who would have to apportion a value to about 250,000 caravans.
I should draw attention to the fact that in the Explanatory and Financial Memorandum it is stated that
A reduction in the additional staff which would otherwise have been required in the Inland Revenue Valuation Office will also be achieved.
If this provision is passed, it is very unlikely that this reduction will be achieved in the coming year. Let me remind Opposition Members, who often

express concern for public expenditure savings, of what they are proposing.

Mr. Stephen Ross: Valuation officers have to assess the number of caravans on a site anyway. I cannot believe that this suggestion will make any extra work for them. I just do not believe that is true.

Mr. Oakes: This is inevitably true. By virtue of the new clause, the Opposition seek to place a burden on valuation officers—not local authorities, they have taken out that proposal—to notify each caravanner on each site. That is precisely the situation we are trying to get away from in this Bill.
I must stress again that it is fundamental to the whole approach in the Bill that the assessment should not be broken down, as a matter of valuation, to individual caravans. The rates become one of many expenses of the site operator, to be recovered through his site charges, and there is no need for the rates to be separately identifiable beyond that point, although, if the site operator chooses to charge rates as a separate item, he could, of course, do so.
Still on the subject of information, I welcome the Opposition's amendment to extend the provision of information to later years as an indication that they will accept my later amendment on this point.
I now turn to the points made on the method of providing the information. I was most surprised to see and hear about the way in which the Opposition propose to get round the problem that the valuation officer cannot be expected to provide information on the rate poundage. If I understand them correctly, they are saying that in order to assess the rates payable on each caravan, each caravanner will have to contact the rating authority in question. Thus 250,000 caravanners, many of whom will be living miles away from the area where their caravan is located, will individually have to contact the rating authority. It will involve caravanners in a lot of trouble and it is, in my view, quite unnecessary to subject the rating authority to a spate of requests for information which can and should be displayed for all to see.
But the Government's main objection to the Opposition's method of conveying the information to caravanners is that it


relies for its effectiveness on the valuation officer being able to trace caravanners and post the information to them. The experience of the past year has shown that in many cases valuation officers will not be able to find many of the addresses, either because site operators refuse to provide them or because caravans have changed hands. It is, therefore, fairly safe to assume that this method will ensure that thousands of caravanners will not receive the information to which they are entitled. The Government's notice board provision on the other hand ensures that any caravanner who visits the site during the season—and this will be the vast majority of them—will be able to see immediately the information relating to rates on the site notice board.
May I now refer to the Government amendments to Clause 2 which will enable the maximum possible information to be given to caravanners? I spoke on Monday in detail about these amendments and I hope that hon. Members opposite now fully understand how helpful this information will be. There was however one query which the hon. Member for Conway raised about Amendment No. 7. His point concerned the deletion of the proposed rateable value of the single hereditament from the notice board. Indeed, this information has now been replaced by the rateable value which is attributable to those caravans not in the occupation of the site operator. This amendment will enable caravanners the better to judge the average rates payable on their caravans and pitches.
The hon. Member for Melton (Mr. Latham) raised a number of matters and asked whether a site operator could pin on the notice board the notices sent to him by the valuation officer. If he wishes to convey the information in that way, he may certainly do so.
The hon. Member also asked whether the Government had changed the wording from "the end of October" to "the beginning of November". The end of October and the beginning of November merge together. It is not a serious point, but we have amended the wording to make it consistent with existing statutes.
11.0 p.m.
The hon. Gentleman asked what would happen if the notice were blown down. On a proper site under the Caravan Sites

Act and Control of Development Act, 1960, I assume that if a notice is blown down the site operator puts it up again. If the hon. Gentleman had experience of the licensing laws, as I have, he would know that if a notice under the licensing laws blows down the applicant's duty is to see that it is replaced. It is easy for the site operator, if he is in proper control of the site, to do that, and I assure the hon. Member for Camborne and Falmouth that most site operators are in control of their sites.
I was asked whether the notice could be put up in the toilet. I suppose that is a good place for it, provided it is displayed in both the ladies' and the gentlemen's toilet. My brother-in-law is a painter for a corporation housing department. He tells me that the one surface he makes absolutely perfect is the back door of the toilet, because that is the surface that people sit and look at. It may be that the back door of the toilet is a good position for the notice to be displayed. Without all the paraphernalia put forward by Opposition Members, a caravanner will be able to see clearly what rates are being charged and judge whether his bill from the site operator has gone up fairly or unfairly. That is all the Government seek to do.
I ask hon. Members to reject the new clause and the amendments put forward by the Opposition and to accept, on behalf of caravanners and site operators, the much better provisions in the Bill.

Mr. Michael Morris: I am pleased to see that the hon. Gentleman has cheered up a bit from a few moments ago. We are conscious that he must be feeling the pressures of Government business. He has been on Committee after Committee—[HON. MEMBERS: "Oh."] It is all very well for you to moan; you were not here on Monday night and did not see how tired Ministers were looking.

Mr. Deputy Speaker: Order. The hon. Gentleman should address the Chair.

Mr. Morris: I am grateful to you, Mr. Deputy Speaker. We all learn from experience.
I am sorry that the Minister has accused us of duplicity. He knows how much we have helped him. The Second Reading debate was on 3rd March, and we gave him every encouragement in


Committee. We could easily have held out in Committee, but we saw the Bill through in three Sittings, which is a reasonable pace. Some would say that we moved forward far too quickly. The hon. Gentleman might care to withdraw his remarks. The role of the Opposition Front Bench is not to ensure that the Government get their business when we have reservations about it. We said from the beginning that there was a problem to be solved, that we were happy to help the hon. Gentleman but that we had reservations about certain aspects. We shall not be filibustered out of full discussion. If the Government cannot get their supporters here on time, it is not our fault.
It seems very strange to English and Welsh Members that we cannot have provisions in England and Wales which are as good as those in Scotland. We understand that the law may be different, but we believe that it should be perfectly possible to have English law which is as good as Scottish law. That is the object of the exercise.
If the Government had taken the trouble to consult the National Caravan Council, the site operators, the Caravan Action Group, and the National Association of Caravan Owners, as we have done, they would have found that those bodies were not satisfied with the proposals of Clause 2 as they stand, even in the amended form brought forward by the Government this evening. They believe that either our new Clause 1 or new Clause 2 would be much better. We are trying to be helpful to the Government by suggesting that there are several ways in which to approach the matter. The Government may well be able to improve on what we have done, but the basis of what we put forward is what the caravanners want.
I am sure the Minister will accept that we should not bear in mind only the benefits to the local authorities. I accept that we need to look at the benefits to the local authorities, but we have to consider the caravanners and site operators as well. As things stand at the moment, neither the caravanners nor the site owners are happy with the Minister's amendment.
As my hon. Friend the Member for Melton (Mr. Latham) said, the Minister

raised some criticisms of new Clause 1 last Monday. We understand and accept them. In the rather limited time left to us, we have brought forward a new clause, and my hon. Friend the Member for Conway (Mr. Roberts) and I have amended the existing new Clause 1. We have met the Government on the points they raised. We have met them on the involvement of the site operator's own van. We have met them on the point about being longer than one year, and on the fact that it is not the valuation officer's job to put down the rate in the pound. We have met them on the point about the notice of deletion. The Government may complain about the time we are taking on this, but we are producing a law that will affect a quarter of a million caravanners, and we might as well get it right, even if it means staying here until the early hours.
It was disappointing that the Minister did not answer my hon. Friend the Member for Melton when he asked for an explanation of subsection (4). The English to be used now in subsection (4) is a total disaster, and I urgently request the Government, just for the sake of simple communication, if it gets through in its present state, to look at it when it goes to the other place and to try to put it into English that ordinary people can understand. At present it would require an experienced lawyer to find a way through it.
My hon. Friend the Member for Falmouth and Camborne (Mr. Mudd) has rightly raised the problem of the £50 penalty. We share his concern. The Minister may say, as he did in response to my hon. Friend the Member for Beeston (Mr. Lester), that the notice board should be picked up if it gets lost. It is a little unrealistic, on a site of 1,200 caravans, to expect one notice board to provide what is required.
When the Minister says that the crux of the matter is that the valuation officers cannot cope, he knows as well as I do—he said it himself here—that the valuation officers have already done the vast majority of the assessments. They do not have to do them again. The vast majority of them exist.
Next, there are the local authorities. There are agreements between site owners and local authorities at the moment. Several examples have been quoted in


Committee and in this Chamber. There are several in North Wales. There is no need for people necessarily to write to the local authority to ascertain the rate poundage. Most of them take the local papers, and they can get to know of it from them, or they can ask their friends. In any event, the Minister says that caravan owners are the same as second home owners. Second home owners have the right to write in. Why should not caravan owners have the same right?
The Minister said earlier that he objected to the fact that caravan owners would write to the local authority to ask——

Mr. Oakes: Mr. Oakes indicated dissent—

Mr. Morris: If he does not object to that, I am happy to give way to him in order to allow him to say so. But he cannot have it both ways.
It was our hope that, even if the Government refused to accept new Clause 1 or new Clause 2 as they are drafted at present, they would at least agree that they go nearer to what the caravanners and site operators want. What is more, I believe that if there had been time to check with the local authorities, we should have discovered that a significant number of them would prefer our drafting, too.
The Opposition have not dragooned their supporters to come here tonight in order to support these proposals. This is not a party political matter. We know that 250,000 caravanners think that we have it right and that the Government have it wrong. We know that because we have asked the views of their representatives. Since Monday, we have checked with the National Caravan Council, the Caravan Action Group and the National Association of Caravan Owners. All have said that they support our new clauses.
We have brought forward practical proposals, and we hoped to get the Government's agreement to them. Certainly we hoped to get their acceptance of the principle that we suggest. I expected the Government to say "Yes, on balance, we think that we were probably wrong, and it would not do any harm to spend a few more days getting it right." After all, we have now reached 1st April, to all intents and purposes, and

the Minister knows that we have not delayed him on the way.
I do not know whether my hon. Friends wish to press the two new clauses, but I have to express some disappointment to the Government that they have not listened to the caravanners.

Mr. Whitehead: Those who listen to and read reports of this debate will probably be amazed at some of our proceedings in the past few days. The hon. Member for Northampton, South (Mr. Morris) made heavy weather of his peroration just now. We had a new clause on Monday. I went into the Division Lobby to support it. The hon. Member for Northampton, South failed to do so because of some prior engagement. He did not have to face the same robust language from the Patronage Secretary as I faced when I emerged from the Lobby. But when an hon. Member comes to this House and participates in a debate, I assume that he votes according to what he intends to be the result of the legislation in question. The hon. Gentleman failed to do that on Monday and, if I correctly interpreted his closing sentences, the Opposition may well withdraw their proposals tonight.
I want to address a few words to my hon. Friends below the Gangway, who are aggrieved at having to be here and are wondering why there is this unrest about the position of caravan owners. New Clause 2 and, to be fair to him, my hon. Friend's Amendments Nos. 7 to 10 attempt to protect a class of people who have reason to believe that they will be chiselled by the site owners and by those who have been assessing them for rates consequent upon the 1966 House of Lords decision unless adequate protection for them is written into the law.
11.15 p.m.
I and most hon. Members know that this Bill is an improvement on the earlier situation, when there were individual valuations. The difficulty is persuading these 250,000 people that that is the case, persuading them that what we are doing in a great hurry in this House is in their interests and will ultimately mean that they pay less, not more in rates. That is the difficulty and that is why we are concerned with obscure points about whether the site notice will blow down or the back of the lavatory door will fall off.
It must be said that there are some who are attempting to speak for the individual caravan owner, the man of limited means taking holidays by the sea in his private caravan. Those people feel that they are being chiselled. The bulk of the work of revaluation has already been done. Consequent upon the rating and valuation of 1973, individual rating revaluations were delivered to every caravan. It is not possible to drive down a street in Lincolnshire without running over some local government official having a nervous breakdown as a result of the enormous pressure placed upon him by these procedures.
The result is that we now have to persuade all those who live in caravans that everything possible is being done to protect them against unfair practices, because within the global charge that will be levelled at them there will be something added on to what they would have paid if they had been individually rated on their own pitch rather than on the total of the site, which is more than the sum total of all the pitches. Secondly, we have to assure them that the law will give them adequate notice and protection against the site owner who seeks to withhold information.

Division No. 101.]
AYES
[11.19 p.m.


Anderson, Donald
Dunnett, Jack
Leadbitter, Ted


Archer, Peter
Eadie, Alex
Lestor, Miss Joan (Eton & Slough)


Armstrong, Ernest
Edge, Geoff
Luard, Evan


Ashton, Joe
Ellis, John (Brigg & Scun)
McCartney, Hugh


Bagier, Gordon A. T.
Evans, loan (Aberdare)
McElhone, Frank


Bain, Mrs Margaret
Ewing, Harry (Stirling)
Mackenzie, Gregor


Barnett, Guy (Greenwich)
Faulds, Andrew
McNamara, Kevin


Bates, Alf
Fernyhough, Rt Hon E.
Madden, Max


Blenkinsop, Arthur
Fletcher, Raymond (Ilkeston)
Marks, Kenneth


Boardman, H.
Forrester, John
Marquand, David


Booth, Rt Hon Albert
Fowler, Gerald (The Wrekin)
Marshall, Dr Edmund (Goole)


Bottomley, Rt Hon Arthur
George, Bruce
Mendelson, John


Bray, Dr Jeremy
Gilbert, Dr John
Millan, Bruce


Brown, Robert C. (Newcastle W)
Golding, John
Miller, Dr M. S. (E Kilbride)


Brown, Ronald (Hackney S)
Graham, Ted
Molloy, William


Buchan, Norman
Grocott, Bruce
Murray, Rt Hon Ronald King


Callaghan, Jim (Middleton & P)
Hardy, Peter
Noble, Mike


Campbell, Ian
Harper, Joseph
Oakes, Gordon


Cant, R. B.
Harrison, Walter (Wakefield)
Orbach, Maurice


Carson, John
Hart, Rt Hon Judith
Ovenden, John


Clemitson, Ivor
Henderson, Douglas
Palmer, Arthur


Cocks, Michael (Bristol S)
Hooley, Frank
Pavitt, Laurie


Cohen, Stanley
Horam, John
Pendry, Tom


Coleman, Donald
Hughes, Robert (Aberdeen N)
Price, William (Rugby)


Concannon, J. D.
Hunter, Adam
Rees, Rt Hon Merlyn (Leeds S)


Conlan, Bernard
Irving, Rt Hon. S. (Dartford)
Reid, George


Crawshaw, Richard
Janner, Greville
Robinson, Geoffrey


Cryer, Bob
Jay, Rt Hon Douglas
Roderick, Caerwyn


Cunningham, Dr J. (Whiteh)
John, Brynmor
Rodgers, George (Chorley)


Dalyell, Tam
Jones, Alec (Rhondda)
Rooker, J. W.


Davidson, Arthur
Jones, Barry (East Flint)
Roper, John


Davies, Denzil (Llanelli)
Judd, Frank
Rowlands, Ted


Deakins, Eric
Kerr, Russell
Sedgemore, Brian


Dempsey, James
Lambie, David
Sheldon, Robert (Ashton-u-Lyne)


Dormand, J. D.
Lamond, James
Silkin, Rt Hon John (Deptford)


Dunn, James A.
Latham, Arthur (Paddington)
Silkin, Rt Hon S. C (Dulwich)

I gave the House examples on Monday of the withholding of information that can take place. I do not think that there is much between the new clause put forward by the Opposition and the amendments tabled by the Government. Rather than detain the House I would go for the four amendments, particularly since the Opposition have virtually announced that they will not press the clause. They did not do so on Monday night and I do not think that they will be bold and valorous now. Many of the constituents of my hon. Friends, like mine, are in this caravan-owning category and it ill-becomes us to treat them frivolously and believe that they do not need the protection of the law and at least the courtesy of a full and adequate debate before this Bill passes on its way.

The Treasurer of Her Majesty's Household (Mr. Walter Harrison): The Treasurer of Her Majesty's Household (Mr. Walter Harrison) rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put:—

The House divided: Ayes 135, Noes 25.

Sillars, James
Urwin, T. W.
Williams, Alan (Swansea W)


Skinner, Dennis
Wainwright, Edwin (Dearne V)
Wilson, Gordon (Dundee E)


Small, William
Walker, Terry (Kingswood)
Wise, Mrs Audrey


Smith, John (N Lanarkshire)
Ward, Michael
Woodall, Alec


Snape, Peter
Watkins, David
Woof, Robert


Spearing, Nigel
Watt, Hamish
Young, David (Bolton E)


Stallard, A. W.
Welsh, Andrew



Stewart, Donald (Western Isles)
White, Frank R. (Bury)
TELLERS FOR THE AYES:


Thomas, Ron (Bristol NW)
White, James (Pollok)
Mr. James Hamilton and


Thorne, Stan (Preston South)
Whitehead, Phillip
Mr. David Stoddart.


Tinn, James






NOES


Beith, A. J.
Johnston, Russell (Inverness)
Shaw, Giles (Pudsey)


Bottomley, Peter
Lawson, Nigel
Smith, Cyril (Rochdale)


Cope, John
Lester, Jim (Beeston)
Steel, David (Roxburgh)


Eyre, Reginald
Moate, Roger
Thorpe, Rt Hon Jeremy (N Devon)


Fairbairn, Nicholas
Monro, Hector
Younger, Hon George


Fairgrieve, Russell
Morris, Michael (Northampton S)
TELLERS FOR THE NOES:


Freud, Clement
Pardoe, John



Gray, Hamish
Penhaligon, David
Mr. Michael Latham and


Grist, Ian
Roberts, Wyn (Conway)
Mr. David Mudd.


Howells, Geraint (Cardigan)
Ross, Stephen (Isle of Wight)

Question accordingly agreed to.

Question put accordingly, That the clause be read a Second time:—

The House divided: Ayes 25, Noes 126.

Stallard, A. W.
Ward, Michael
Woodall, Alec


Stoddart, David
Watkins, David
Wool, Robert


Thomas, Ron (Bristol NW)
White, Frank R. (Bury)
Young, David (Bolton E)


Thorne, Stan (Preaton South)
White, James (Pollok)



Tinn, James
Whitehead, Phillip
TELLERS FOR THE NOES:


Urwin, T. W.
Williams, Alan (Swansea W)
Mr. James A. Dunn and


Wainwright, Edwin (Dearne V)
Wise, Mrs Audrey
Mr. Peter Snape


Walker, Terry (Kingswood)

Question accordingly negatived.

Clause 1

RATING OF CARAVAN SITES IN ENGLAND AND WALES

Mr. Michael Morris: I beg to move Amendment No. 1, in page 1, line 7 leave out "400 square yards" and insert
800 square yards or metric equivalent".

Mr. Deputy Speaker: With this it will be convenient to take Amendment No. 11, in Clause 3, page 4, line 7, leave out "400 square yards" and insert
800 square yards or metric equivalent".

Mr. Morris: These two relatively minor amendments come back to the matter of 400 square yards. They refer to the 400 square yards basis of the Caravan Sites and Control of Development Act, 1960. It seems to us that instead of slavishly following that Act, we should recognise that times have changed a little and that in concert with the Government we would wish to reduce the burden on local authorities and on valuation officers. It therefore seems that, as 400 square yards is regarded as about the sort of area which, with two caravans, can be excluded from these provisions, it is reasonable to suggest that we should double that to four or five vans. In doing that we should not be driving a coach and horses through the Act, but bringing a little common sense to part of the Act as it applies to England, Wales and Scotland.
I am slightly disappointed that the Government have not used the metric equivalent. I know that they have withdrawn the general Bill on metrication, but we are operating, particularly under other land legislation, in metric measurement, and it would seem appropriate to refer here to square metres.

Mr. Hector Monro: I support the amendments, particularly in the Scottish context. I hope that the Minister has learned in the last hour and a half that it is much better to be help

ful and co-operative than to proceed by the closure. I am certain that the Patronage Secretary will have learned that he probably cannot move another Closure.
Does the Minister realise that 400 square yards is a remarkably small site? It is probably half the size of the Chamber. It will accommodate at best probably only two or three caravans. It would therefore seem only logical to exclude such site from the Bill. We are thinking here in terms of the average farm which might hive off a small corner to promote caravanning. The tourist boards, the caravan clubs and anyone who wishes to promote rural development would approve of that. Yet if that scheme is implemented on the most humble scale it will involve the whole paraphernalia of the Bill.
The Government should accept the amendments. They arise after careful consideration and consultation by my hon. Friends over recent weeks with all concerned. I shall be interested to hear the Minister's cogent, educative and constructive reasons for bringing farmers in this category within the ambit of the Bill instead of cutting out the monumental amount of paper work that Ministers have introduced into our national life. Out of common sense the Government should accept the amendments.

11.45 p.m.

Mr. George Younger: I add my support to what has been said by my hon. Friend the Member for Dumfries (Mr. Monro). I hope that the Government will regard the amendments as constructive. Those people concerned with caravans and caravan sites genuinely believe that 400 square yards is on the small side. I have measured the Chamber as best I can and I believe that 400 square yards cover about two-thirds of it. That is a small area of ground.
To put all the complications of this legislation upon such a small site seems to be taking a sledge hammer to crack a


nut. The purpose of the Bill would not be altered if we were to make the larger area the minimum size. A large number of very small places where caravans are placed—I should hardly call them sites, because an area of 400 sq. yards is very small—would be exempted. That would make the job of the assessors easy in Scotland. This provision could be extended later if some anomaly were caused by the larger size of site.
I hope that the Minister will take this as a constructive suggestion. If he cannot accept the amendment, I hope that he will at least give it serious consideration.

Mr. Oakes: I do not regard this as a destructive type of amendment. This is a matter of judgment. The Opposition take one view. The Government take another. The amendment seeks to double the size of the area in the Bill. It is a question of size, and size only, about which we are talking.
Apart from the 1960 Act, we chose this size of site because it could have one, two or possibly three caravans on it. Doubling the area would mean that the site could probably take six or seven caravans. That would be getting on for a caravan site. Our judgment is that we should stick to the Act and the very small site where it is not worth the valuation officer making a separate assessment for what would be a one-van, but occasionally two-van, site. The amendment seeks to extend the size more than marginally, because, by doubling the area, the site would be a viable site for four, five or six caravans.
The hon. Member for Dumfries (Mr. Monro) referred to a farmer allowing a corner of a field to be used for caravans. We are talking about the holiday caravan on a site in such a state of permanence or semi-permanence that it becomes a hereditament. I must use the English term "hereditament". I do not know the Scottish equivalent. We are not talking about the touring caravan or the fanner who, under the Act, allows two or three caravans to use a corner of one of his fields for a few nights. They are not rated at all.
This, as I have said, is a matter of judgment. I think it is better to stay within the provisions of the 1960 Act. We should exclude the one- or two-van

sites, but not extend the provision beyond that.
I do not regard the amendment as destructive. It is a matter of judgment. I think that the Government's judgment is right.

Mr. Cope: There is one element in both amendments to which reference has not so far been made. The amendments provide, as the drafting of the Bill does not, for the metric equivalent to be substituted for the number of square yards.
There was some confusion last week whether we should start to use the metric equivalent for some things. I think that it would be useful if we got into the habit of inserting phrases in uncontroversial legislation which would allow the metric equivalent to be used. Whether we like it or not, many measurements, including square yards, will gradually go in the direction of metric equivalents. That is the way in which the world has gone. The United Kingdom is becoming one of the few countries which have not actively switched over to metric equivalents.
The Government were probably right to drop the metrication legislation last week. However, in Bills such as this, where matters are not so controversial, I think that we should have the metric equivalent. Of course, this Bill is controversial in other respects, because it is against the interests of caravanners, as I explained earlier and will do my best to explain later on other more appropriate amendments. Nevertheless, in terms of square yards or the metric measure, square metres, this is where we might usefully insert "square metres" into the Bill. I should have thought that to be a useful feature of the two amendments.

Mr. Oakes: With the leave of the House, I should like to reply. I apologise to the hon. Gentleman for not dealing with the point about the metric equivalent.
There is nothing sinister in relation to metric equivalents. In the Bill we followed normal rating legislation, which deals in yards and the other English measures. This matter arose in Committee. I said then that we would consider whether we would bring an amendment to the House putting in the metric equivalent. There is no purpose in the


words "or the metric equivalent." Subsequent legislation would deal with this matter if the House decided that we were to go into metric measurements. On balance, however, we thought that we would leave it within the general rating legislation which deals in yards, rather than, in the course of this Bill, pre-empt a decision—controversial on both sides of the House—whether we should put it in square metres. That was the simple reason behind it. We left the matter in accordance with the general provisions of present legislation, so that we would not have on this Bill the debate that we might have had last Thursday.

Mr. Michael Morris: I am grateful to the Minister for his observations on the amendment. I am still a little mystified about how under the land legislation, the most recent Order that we debated, which was concerned with area, was all in metric equivalents. In fact it was in metric terms only, and not in yardage at all. We were dealing with square metres. However, I take the Minister's point.
I am sure that the Minister appreciates that the sole reason that we have put this amendment forward was to help local authorities and valuation officers. I believe that what we have suggested would have helped them, and that it was a slightly more practical way of dealing with matters. However, we must rest on the Minister's judgment. He has the resources to consult the various bodies. I hope and assume that he has done so. If their judgment remains at the figure of 400, so be it.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Mr. Oakes: I beg to move Amendment No. 2, in page 2, line 16, at end insert—
Where by virtue of this subsection a hereditament is for purposes of section 48 of the General Rate Act 1967 a mixed hereditament as at the 1st April in any year, it shall be treated as being a mixed hereditament throughout the rating year beginning with that date, notwithstanding that it appears to the rating authority or is determined to have ceased to be one.'.
If I may resume the kind role that has been assigned to me, of being courteous and educative, let me say that this amendment results from an Opposition amendment

in Committee. I undertook that if Opposition Members withdrew that amendment, I would introduce a Government amendment, perhaps more accurately worded, with the advice of legal draftsmen, but related to the same point.
The purpose of this amendment is to avoid the situation where the site operator might have to meet an extra bill for rates during the course of a rating year, because his site has lost its status as a mixed hereditament, after he has fixed his charges to the caravanners on the basis that the site is rated as a mixed hereditament.
The Opposition amendment confined the continuation of mixed hereditament status to cases where the loss of it would otherwise have been caused by caravanners opting for separate assessments under Clause 1(7). This is not the only possible cause. It might arise from a reduction in the number of separately rateable caravans. The Government amendment accordingly operates on the fact of the loss of status, whatever the reasons for it. Indeed, we go wider than the amendment put forward in Committee.
The likelihood of a site ceasing to be a mixed hereditament is not great because in almost all circumstances it will be more favourable for the caravanner to be included in the single assessment, and on most sites the value attributed to the separately rateable caravans will greatly predominate.
Nevertheless, if this does happen part way through the rating year, the site operator will have to pay the difference between the commercial rate and the mixed hereditament rate for the rest of that year. He will, however, have set his charges on the basis of the lower level of liability for rates. This amendment thus prevents the need for an extra charge to be made on the caravanners remaining in the single unit for the rest of the rating year. In the following year the site operator will be able to set his charges according to the changed status of the site.

Mr. Giles Shaw: The hon. Gentleman has said once again that the rating of the single site will be of benefit to caravanners. How does he believe that to be the case? There is some doubt among my hon. Friends whether a total


site rating will be of benefit to the individual caravanner.

Mr. Oakes: The hon. Gentleman was not a member of the Committee, but this is a matter that was discussed at some length in Committee. I explained that the rating of the site as a whole will be of benefit to the individual caravanner, and I believe that my explanation met with the agreement of the whole Committee. When valuing a site as a whole the valuation officers will take into account a number of factors that are not considered when assessing the individual caravanner. For example, they will take all the amenities of the site into consideration.
We have received the advice that there will be an appreciable reduction in the payment of actual money in rates to the site operator because the assessment of the site as a whole will be less than the total of the individual ratings. In an earlier debate the hon. Member for Gloucestershire, South (Mr. Cope) was arguing the reverse case. As I understand it, the site as a whole will have a lower rating than the sum of the individual caravans and the caravanners will benefit.

Mr. Michael Morris: I am grateful to the Minister for taking on board the point that we were making in our amendment in Committee and for widening it on Report. Although he is fairly confident that it will be an exceptional case in which there will be implementation, our evidence indicates that it will not be such an exceptional event as he suggests.
I am grateful to the hon. Gentleman for reaffirming that the single site assessment will produce a lower overall assessment than that produced by each individual caravanner having a separate assessment.
There is an area of confusion among caravanners which it is appropriate to put on the record. If the hon. Gentleman does not want to answer this point immediately, perhaps he will answer on Third Reading. There is some confusion whether a caravanner who opts for separate assessment will get full domestic rate relief. At present, under a mixed hereditament, he will get a half. Surely it is logical that if he goes for a separate assessment he shall get the full domestic rate relief. As the Minister has said on

many occasions, they are the equivalent of second homes.

Mr. Oakes: I intervene at this stage to save the time of the House. Yes, there will be the relief about which the hon. Gentleman is asking.

Mr. Morris: I am extremely grateful to the hon. Gentleman. That was an important point and the hon. Gentleman has removed an area of confusion. I welcome the amendment and I am most grateful to the hon. Gentleman for tabling it.

Mr. Whitehead: I, too, welcome the amendment. I think that it will be of use. There is one other misgiving that I must mention. Many people feel, I believe wrongly, that under Clause 1 they will not be able to make application to be separately rated if the switch is made to single hereditament rating. It may be that my hon. Friend the Minister is right and that caravanners will pay less if they opt for global rating. Nevertheless, in view of the misunderstandings in the past year with local authorities, it is important that those concerned should know that they have rights under Clause 1(7) to opt for individual rating if they choose.

12 midnight

Mr. Michael Latham: The Under-Secretary of State for the Environment in moving the amendment dealt with the point that we raised in Committee. Indeed, in Committee the Minister said:
 … in the overwhelming majority of cases the individual caravanner will pay less rates and be better off as the result of caravan sites being treated as separate units. There may be some very rare cases where that is not the position—for example, the individual who is entitled to special rating relief as a disabled person. It may be better for that person not to be included in the global assessment. As I have said, such cases will be very rare."—[Official Report, Standing Committee B, 16th March 1976; c. 38.]
The Minister has said that on a number of occasions, and indeed he said it again tonight, but he has never produced any evidence. Instead, he has stated it as a fact. The reason that he has produced no evidence is that there is no evidence, because nobody knows what the situation will be. We are dealing here with unchartered seas of valuations in rating entities that have never before been rated—namely, leisure caravans. The Minister


should not make general observations about differences in rate poundage in respect of individuals on a site when rated separately when the Government have no evidence on the matter.
My hon. Friend the Member for Northampton, South (Mr. Morris) asked about rate reliefs. The Minister intervened to say that this would be covered. Could the Minister deal with the question of instalments? Let us suppose that a domestic ratepayer was not convinced of the Minister's arguments or was one of the disabled persons to whom the Minister referred and chose to exercise his rights under Clause 1(7) to opt for a separate assessment. Will such a person be entitled to pay by instalments if the site becomes a mixed hereditament? This is an important matter because those on mixed hereditaments are not eligible as of right to pay by instalments. The right to pay by instalments is a treasured right for an ordinary ratepayer. If a person is able to pay in 10 or 12 instalments, he does not necessarily pay in anger. Caravanners who choose to exercise their rights under Clause 7(1) to opt out will need an assurance that if the amendment is carried and they are in a mixed hereditament, they will still have the right to pay by instalments.

Mr. Roger Moate: The amendment refers to 1st April as being the key date. If my watch is correct, we are now in 1st April—

Mr. Robert Hughes: April fool.

Mr. Moate: That date has assumed an almost magical significance for the Under-Secretary of State for the Environment. Indeed, he has expressed his regrets that the legislation will not be through by that date. The hon. Gentleman knows that I voted against the Second Reading. I regard this measure as misjudged and calculated to cause greater confusion to site operators, caravanners, valuation officers and district councils. I think that it is a bad Bill and I believe that the Minister will come to regret having adopted this course of action.

Mr. Robert Hughes: Why not deal with the amendment.

Mr. Moate: I was referring to the date 1st April in regard to the amendment,

and if I had been out of order I am sure that I would have been called to order by the Chair.
I should welcome a statement from the Minister about the effect of the delay in this legislation on ratepayers and site operators. Was his determination to get the Bill through by this date because he wished to be helpful to the public so that they would know their assessments as soon as possible, or is there some legal significance in relation to the assessments being made for the coming financial year?
The Minister claims that caravanners will benefit from lower rates as a result of overall site assessments. This is a fundamental part of his case, but he has produced no evidence to substantiate it. In many ways, the logic of the argument points in the opposition direction. If a caravanner has a separate assessment, he is entitled to domestic rate relief, but on a single site assessment, he is entitled only to the benefits of a mixed hereditament status. Thus, there will be an automatic discount if he secures a separate assessment.
In the past year, when caravanners appealed against an assessment, they often obtained a further reduction, even after taking into account full domestic rate relief. The Minister may be wrong and caravanners may be disappointed to discover that there is no substantial reduction on the rates they paid last year.
I suspect that caravanners will apply for separate assessments on a far greater scale than envisaged by the Minister and they will then be entitled to pay their rates by instalments, as can domestic ratepayers. Otherwise, they will have to pay rates to the site operators and, even though the Minister says that, in theory, caravanners will be able to pay by instalments, I do not see how that could work out in practice. Consequently, there will be yet another incentive for caravanners to apply for a separate assessment, thereby negating the whole purpose of the Bill.
At the end of the day, we shall be back roughly where we started. Last year, through no fault of the Minister, we had a shambles in the rating system. This legislation, which is meant to cure that situation, will make it worse.
I shall be glad if the Minister will answer some of these points.

Mr. Oakes: I shall try to do so, though most of them do not relate to the amendment which we tabled in accordance with an undertaking given to the Opposition in Committee. I thank the hon. Member for Northampton, South (Mr. Morris) for his remarks on that matter.
If I may trespass on the borders of order in answering some of the points raised in the debate, I can tell my hon. Friend the Member for Derby, North (Mr. Whitehead) that there is a statutory right under Clause 1(7) for any individual caravanner to make an application for a separate assessment if he wishes. The valuation officer must then act upon that request. Whatever a site operator or local authority may say, that is his statutory right.
It is difficult to explain in a few words why it will cost the caravanner less to pay the normal charge on a site assessment than to have a separate assessment. It is not true that we are going into uncharted waters. The advice of the Valuation Office arising from experienced gained since 1966 is that less money will be charged in rates for the site as a whole than if each individual caravan is separately assessed.
I explained in Committee the provisions for the relief of disabled people. Here again I am on the margin of being in order, as the subject may arise on a subsequent amendment. In rare cases a disabled person might find it beneficial to apply for a separate assessment. I urge disabled people to ask the valuation officer whether it is better to be separately assessed or to remain within the general assessment of the site as a whole. Advice will freely be given to a disabled person. The valuation officer would give advice whether an existing rateable caravanner is entitled to disablement relief. Some disabled persons might be better off if separately assessed, but by no means all.

Amendment agreed to.

Mr. Oakes: I beg to move Amendment No. 3, in page 3, line 9, leave out subsection (9) and insert—
' (9) This section shall have effect for any rate period (within the meaning of the General Rate Act 1967) beginning after the end of March 1976; and any proposal of the valuation officer made during the year beginning with the 1st April 1976, if it could have been made on that date had this section been then

in force, may be made so as to have effect as of that date, and section 79 of the General Rate Act 1967 (which relates to the effect of alterations in the valuation list) shall apply accordingly.'.
The purpose of the amendment is to ensure that any proposal made during the 1976–77 rate year to assess caravans and site as a single unit, and also any alteration to the valuation list as a consequence of such a proposal, may be effective from 1st April 1976, notwithstanding the fact that the Bill will not receive the Royal Assent by that date. Without such a provision, much of the benefit of the Bill in 1976–77 would be lost, since rating authorities would have to levy rates on each separately rated caravan for the period up to Royal Assent, and on the new composite assessment for the rest of the rating year.
Opposition Members say with pride that we have gone beyond twelve o'clock, but do they want a 14-day assessment which would not be operative until the amendment is made? I understand that the next date for the Royal Assent to be given is 14th April. The other place inserted 1st April in case the Bill received Royal Assent before 1st April 1976 and to ensure that the Bill would not lead to a complete reassessment for the previous rating year. That is why 1st April 1976 was inserted originally. All this further amendment does, admittedly, is to make the provision very slightly retrospective. But the retrospection is very technical. The Bill has now been before Parliament since before Christmas, and those affected will have assumed that it would be in force for the whole of the rating year from 1st April 1976.

12.15 a.m.

Mr. Michael Morris: I think that what the Minister is suggesting is that every valuation officer up and down the country is ready and willing to start work today, but on other occasions he has suggested that they are not. The Opposition would at least question whether it is right that, where the valuation officer has not yet done his inspections, the effect should go right back to 1st April. There may be some who, for one reason or another, because they have a local agreement already operating—such as some of the North-West authorities—will not bother to do it until later in the season.
The amendment refers to Section 79 of the General Rate Act 1967. Part of Section 79 refers to the alteration in the valuation list. Section 68 says that if a change happens it shall be only from the date when the new or altered hereditament comes into operation. Under subsection (4)(f) there is a category of
property previous rated in parts becoming liable to be rated as a single hereditament".
I am sure that the Government lawyers have got this right, but as I read the General Rate Act 1967, it appears to suggest that the operative date cannot be 1st April in those situations where an alteration is made as it applies to the General Rate Act.

Mr. Michael Latham: The Minister did not answer the question I asked on the last amendment concerning instalments and mixed hereditaments. Perhaps he would be good enough to write to me about that. I could have interrupted him but chose not to do so.
The Minister asked what the Opposition are trying to achieve. I think that the Government have introduced the wrong Bill, and that they should be seeking to do something quite different. The date 1st April has no great interest or relevance to me. It is an entirely wrong Bill which fails to undo the damage done by the Field Place case.
The Minister talked about local authorities and others having assumed that this legislation would be through before the start of the rating year because it had been placed before Parliament as long ago as last Christmas. I hope he will reconsider that. Local authorities and others should not assume anything about the progress of legislation through this place. We are in this House, and others are in another place, in order to review and discuss all the details of legislation.
Local authorities should wait until legislation has reached its final form on the statute book before they send out circulars about rating, particularly when it is proposed, as in the Bill, to change the whole system. The Minister should think rather more carefully before making remarks of that sort, which could be construed in the wrong way by people outside this House.

Mr. Moate: First, I thank the Minister for explaining the matter which I raised

on an earlier amendment, wrongly as it transpired.
Next, I make one general point. In our debate on Monday, the Minister made it clear that he was not impugning the motives of anyone and that no one should impugn his own. Certainly I do not impugn his motives in this respect.
Having said that, I find the wording of the amendment a little alarming. I accept that this legislation is likely to be through all its stages within a few days and that there is likely to be very little retrospection in assessments. But the wording contains a dangerous principle. It may be that there are precedents for it, of course.
The provision reads:
… and any proposal of the valuation officer made during the year beginning with the 1st April 1976, if it could have been made on that date had this section been then in force.
I suggest that that is a classic description of retrospective legislation. Using that same wording, it would be possible to introduce a new tax in the autumn and to say that this tax applies on the assumption that the legislation was in force on 1st April last. The wording is extremely wide and contains dangerous implications.
The amendment draws attention to the problems still facing site operators. On 1st April or soon after they may be told about the rates which will be levied on their sites—rates of a very much greater order than they have experienced before. They have to collect these rates themselves from the caravanners. The site owners are liable immediately for all those rates from the beginning of the year, yet they have now to go through the complex process of recovering them from the caravanners. This is quite unfair.
Site owners have already tried to establish their service charges and rentals for the coming year and in many cases they have already collected them from the individual caravanners. They still have no means of knowing what rates they will have to collect. But there is no provision in the Bill for bad debts that they are unable to recover and no way for them to obtain waivers in respect of people moving off their sites.

The amendment demonstrates yet another unfairness in this legislation.

Mr. Oakes: We had this on Monday. We have it again tonight.
What this Bill does not do and what some hon. Members wanted it to do is to say that there shall be individual assessments for caravans and pitches. Instead, it provides that the rates shall be collected by the site operator and not paid directly to the rating authorities.
This year, in the overwhelming majority of cases, the rent has been paid and the rate demands for last year have gone out. The people materially affected by the date—whether it be 1st April or 14th April—are the valuation officers. All that the amendment does is to say that there shall be a clean start at the beginning of the ordinary rating year, rather than a 14-day assessment under the old scheme for next year and a 50-week assessment for the remainder of the year under the new scheme.
As for the wording, I listened carefully to the arguments of the hon. Member for Northampton, South (Mr. Morris) about the 1967 Act. As I said earlier, it is a matter of judgment whether the legal draftsmen are right or whether the hon. Gentleman is right. I prefer to back the legal draftsmen, but if I am wrong we shall try to get it put right in another place.

Amendment agreed to.

Mr. Michael Morris: I beg to move Amendment No. 5, in page 3, line 9, at end insert:
'(10) For purposes of this section a caravan pitch shall be taken as excluding a caravan thereon which is any structure as is mentioned in section 45 of the General Rate Act 1967 '.
This is a probing amendment. In Committee we had a brief discussion about the situation of the disabled and looked at the Scottish provisions under Clause 3(5)(b). It seems appropriate that there should be some similar provision for England and Wales. It may be that there is adequate provision hidden within the Bill and the Minister may say that it need not be spelled out in the same way as is necessary for Scotland.

Mr. Oakes: I cannot answer the hon. Member's question about the difference between the Scottish provision and that for England and Wales. I think that it results from the difference in the Scottish

rating system. Perhaps when my hon. Friend the Minister of State at the Scottish Office is dealing with the Scottish provisions, he will mention the differences in the rating provisions.
What we seek to do is to give freedom of choice to the disabled caravanner because circumstances may be different in each case. We want to give such a person the choice to decide whether he wishes to be separately assessed. The amendment makes it necessary for him to be separately assessed—whether or not he wants to be—because he is disabled. In many cases such a disabled caravanner would be better off being so assessed but in other cases that may not be so. It is better for the individual to make a choice after consulting the valuation officer. I accept that the amendment seeks to help.
In Committee the hon. Member for Falmouth and Camborne (Mr. Mudd) asked whether I could give him the number of disabled caravanners. We have tried to discover the number but this is not possible without a disproportionate amount of work which would cost a great deal of public money. I am sure that the hon. Gentleman does not want that. I cannot give the exact figure but I understand that the number is small.

Mr. Michael Morris: I am grateful to the Minister for that reply. It is right that it should be on the record that it is the Government's view that disabled people should look seriously at the question of individual assessment. In view of the Minister's reply, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2

INFORMATION FOR CARAVANNERS ABOUT FIRST PROPOSALS UNDER SECTION 1 AS TO CARAVAN SITES.

Amendments made: No. 7, in page 3, line 21, leave out from beginning to 'the' in line 26 and insert:
' (2) After receiving a notice under subsection (1) above the site operator shall display a notice on the site from the beginning of April to the end of October in every year so long as the proposal is current or the site or part of it is treated as a single hereditament under section 1(1) above (but starting with the April following the receipt of the notice under


subsection (1), if it is received in October), and shall state in the notice so displayed—

(a) that part of the site included in the hereditament by the proposal or in the valuation list (or that the whole site is so included);
(aa)'.

No. 8, in line 30, leave out 'proposal is made' and insert
'notice is for the time being displayed.
(2A) If at any time it appears to the valuation officer that the facts stated in a notice under subsection (1) above or under this subsection are no longer accurate, he shall give to the site operator a further written notice bringing the facts so stated up to date; and the notice or last notice received by the site operator under this subsection shall after his receipt of it (or, if it is received in October, then from the beginning of the following April) take the place of the notice under subsection (1) for purposes of subsection (2)(b) above.'

No. 9, in line 35, leave out from 'the' to second 'the' in line 40 and insert
'hereditament by the proposal or in the valuation list.
(4) If so requested by a person occupying any such pitch as aforesaid,'.

No. 10, in line 42, at end insert
'as the subsection would apply at the time of the request if a notice were required to be displayed at all times after receipt of a notice under subsection (1) and to take account of any notice received under subsection (2A) '.—[Mr. Oakes.]

Clause 3

VALUATION AND RATING OF CARAVAN SITES IN SCOTLAND

The Minister of State, Scottish Office (Mr. Bruce Millan): I beg to move Amendment No. 13, in page 4, line 22, at end insert:
' Provided that any such alteration which is made during the year 1976–77, in a case where the caravan site would have been treated as such a single unit of lands and heritages as from 1st April 1976 if this Act had been in force on that date, shall have effect as from that date.'.
This amendment is the Scottish equivalent of Amendment No. 3. It arises because the Bill will not be on the statute book by 1st April. It is necessary to have these words to provide that there should not be two assessments in 1976–77 and to ensure that the Bill will apply from 1st April 1976.

Mr. Younger: I thank the Minister of State for tabling this amendment. I have consulted my hon. Friends who

were on the Committee and it is acceptable to them. I suggest that we agree to it.

Amendment agreed to.

Clause 5

TRANSITIONAL PROVISION FOR SCOTLAND

12.30 a.m.

Mr. Millan: I beg to move Amendment No. 14, in page 6, line 16, leave out from "(1)" to "the" in line 19 and insert
Where before the passing of this Act an agreement is entered into, relating to the payment of rent, between the site operator and the occupier of lands and heritages which consist of a pitch for a leisure caravan on the site and which for the year 1975–76 are separately entered in the valuation roll.

Mr. Deputy Speaker: With this amendment we may discuss the following amendments:
No. 15 in page 6, line 17, leave out "19th December 1975" and insert "3rd March 1976".
No. 18 in line 17, after "1975", insert
or in the case of an agreement entered into after 19th December 1975 but before the date on which this Act comes into force when it is evident that the agreement was entered into on the basis that the occupier would be liable for the rates attributable to that pitch".
Government Amendments Nos. 16 and 17.

Mr. Millan: These amendments concern the transitional provision. In Scotland the situation is not discretionary for assessors. We have tabled the amendments because there may have been agreements which were legitimately and innocently made without knowledge of the Bill. Those agreements may not have provided for any variation in terms. Without a transitional provision, site operators might be faced with additional financial obligations which could not be passed on to individual caravanners, as is intended.
Originally the relevant date was 19th December 1975, the date of the Bill's publication, but in Committee hon. Members pointed out that there could be agreements which had been entered into after that date in ignorance of the provisions of the Bill. I said that I would look again at the matter. Amendment


No. 14 changes the date from 19th December to the date of the Royal Assent—which is slightly better than the suggestion in the other amendments. The Government amendment provides that all agreements which are entered into up to Royal Assent can be varied.
Amendment No. 16 defines the circumstances in which adjustments should be made. If the transitional provision is written into the Bill in too absolute terms, there could be double counting and the caravanner might be put at a disadvantage because of the adjustment. The amendment tightens up the wording and makes it more precise. Amendment No. 17 is basically a drafting amendment.
The amendments take account of the points made in Committee. I hope that they are acceptable to the House.

Mr. Younger: I thank the Minister for the trouble he has taken. I agree that his amendments are better than ours and suggest that the House accepts them.

Amendment agreed to.

Amendments made:

No. 16, in page 6, line 22, leave out from second "site" to end of line 23 and insert
which is reasonably attributable to the pitch of such occupier and which but for the enactment of section 3 above would not be payable by the site operator".

No. 17, in page 6, line 24, after "(5)", insert "(9)".—[Mr. Millan.]

Motion made and Question proposed, That the Bill be now read the Third time.

12.34 a.m.

Mr. Michael Morris: My hon. Friends and I still feel rather uneasy about the Bill. On Second Reading we acknowledged that there was a problem and that it had to be tackled, but the longer I have lived with the Bill the more convinced I have become that we have not yet found the right answer.
We are dealing with a tax, and the skill of making good taxation is that it should be fair and equitable in its incidence, simple to administer, easy to collect and successful as a revenue-raiser. We are a long way from achieving that with the Bill.
What is distressing is that the problem has been around for 10 years, since the Field Place Caravan Parks Ltd. v. Harding case. The Minister said on Second Reading that in the intervening period the valuers had had more important things to do than to value caravans. But in the period 1974–75 the valuation officers got round to making the effort, and then the cry went up from the local authorities that as a result of the valuers' work they would have to send out 250,000 rate demands.
The Government have known about the problem ever since they came to power in February 1974. They have had plenty of time to get to grips with it and to consult the interested parties. The extent of consultation with the caravanners and site owners can only be described as appalling. There is no excuse for a Government to introduce legislation without having carried out proper consultation. It is little wonder that the matter has caused an adverse reaction in the country.
The Government did not analyse in sufficient depth the kernel of the problem. The Under-Secretary said on Second Reading:
In summary, the net result of this measure is that the cost of collecting rates will be reduced, to the benefit of local authorities and ratepayers. Anything which does that must be a good thing and welcome to both sides of the House. I commend this small but useful Bill to the House."—[Official Report, 3rd March 1975; Vol. 906, c. 1332.]
If that had been what it was all about, the Bill would have had a simple and uncontroversial passage. But the real problem was the one identified by the Minister of State, Scottish Office, when he said:
I have considerable sympathy with those who say that caravans used for leisure purposes as distinct from those used permanently for homes should not be rated. It is a fine balance of judgment. I do not pretend that the arguments are all on one side. There is a respectable argument for saying that caravans used for leisure purposes should not be rated. But we are not providing for the rating of these caravans for the first time in this Bill. The law has been established. We are not consolidating or formalising the law. The law having been established, this is a more convenient way of rating for leisure caravans.
It would have been open to the Government to take the view that we should change the law in a substantial way. But, looking at it from the point of view of local authorities and ratepayers generally, I do not think that the argument comes down in favour of the leisure caravan owner not being rated."—[Official Report, 3rd March 1976; Vol. 906, c. 1381.]


The real problem is that the law is not as formalised as the right hon. Gentleman suggested.
The principal case which we take as our starting point was not watertight or particularly clear, because there was left open the crucial question how long is "permanent". In another place the noble Lady, the Under-Secretary, indicated that it was more than a year. It is because the case law is not definitive that there are so many appeals outstanding—100,000 or so. That should have been warning enough to the Government that the law needed to be changed substantially. Because many caravanners believe that their caravans are more tourer than residential, many thousands will opt for separate assessment. That is on top of the 100,000-odd outstanding appeals.
The Government were wrong not to go back to first base, but that was their judgment—whether to cure the ill that we all recognise by radical surgery or to do running repairs. But, having decided to do running repairs, they then had to decide between doing sound repairs and doing a botched job.
Any problems of time they have had are entirely of their own making. We have not obstructed the Bill. It has moved through both Houses with exemplary—some would say too much—speed. It was the Government who decided to forget all about the caravanners and site operators and to concentrate on the superficial convenience of the valuation officers and local authorities. I do not impugn their motives but I seriously criticise their analysis of the problem.
The Under-Secretary said on Second Reading:
It has also been said that the separate assessment should continue but that site operators should be made responsible for collecting the rates on individual caravans and should be given an allowance for doing so. I admit that this is an alternative which I have considered carefully. However, I have decided that, although that would have relieved rating authorities of many of their problems, it would not have made things easier for valuation officers. They would still have to identify the individual caravan owners, assess the caravans and serve the notices."—[Official Report, 3rd March 1976; Vol. 906, c. 1331.]
So the Government made what they will come to regard as the fateful decision to

act under Section 24 rather than Section 55.
The Under-Secretary probably knows in his heart, as we know, that the latter would have been preferable. As we know from the Committee debates and the consultations, it would have been no more expensive or complicated, but it would have had the great merit of satisfying caravanners and site owners, instead of the present situation, which satisfies neither.
However, being a good and, I hope, constructive Opposition, and despite the handicap of those fundamental errors, we have tried to make this patching operation workable and fair. In the other place, the Opposition raised the question of notifying caravanners. It was the Opposition who knocked some sense into the timing of the display of notices and brought to the Government's attention the nonsense of the timing in Scotland and secured a transitional phase.
It was the Opposition who on Monday evening offered the Government the opportunity to make partial amendments for their total neglect of the caravanners. We have demonstrated with our amendments tonight that it is possible both to maintain ease of collection for local authorities and provide a service—

Mr. Deputy Speaker: Order. I hope that the hon. Gentleman will deal only with what is now in the Bill and not with amendments which might have been made.

Mr. Morris: I am grateful for your advice, Mr. Deputy Speaker. I think that little is lost, as the Government take the Bill away, in pointing to the errors which have been made.
It is not sufficient for the Government to say that our proposals would put an extra burden on the valuation officers. We do not know whether the Government have analysed the costs of the outstanding appeals, but our information suggests that far more will be spent on those appeals than is likely to be raised under the Bill.
There is one other worrying dimension on which the Government have turned their backs—the status of the leisure caravan owners. The Government have made clear on several occasions that they view them as, in effect, second home


owners who should pay their share of rates. They have also stated that it is to the benefit of caravanners to have single site assessment because overall assessment of a site is lower and will attract the benefit of half rate relief for domestic hereditaments. The Government have clarified the position of those who opt for separate assessment and confirmed that they will get rate relief. There was confusion over this, and we are grateful for the clarification.
The Government must now know that many caravan owners believe that they fall outside the scope of the Bill because a surprising number move their vans in sites and between sites within a season. We know that valuation officers have not or cannot have regard to this problem and that caravan owners will want to appeal. They would appeal against the site assessment but they know that they cannot do so under the Bill as it stands, so they will have to opt for separate assessment.
As to the result, we have had the example given to us by the hon. Member for Derby, North (Mr. Whitehead). Even good operators—and the vast majority of site operators are good operators—will get incensed with van owners who go for individual assessment and I regret that the basis of the Bill as it stands is a recipe for disharmony and chaos.
Finally, the local authorities and valuation officers, who are, I believe, the sole beneficiaries, are not playing the game either. There are examples of local authorities sending out separate demands for refuse collection and charging for other specific services. There are examples of valuation officers sending out assessments before we have finished our deliberations on the Bill. I hope that the Minister will come down hard on local authorities jumping the gun and that the Treasury will deal likewise with valuation officers.
It is a sad fact that the Bill has been a case of rush, rush, since it was published. It would have been far better to take it slowly and to build in an adequate transition phase not just for Scotland but for England and Wales. Caravanners are ordinary people enjoying a simple recreation. Today they are up in arms and sceptical of the Minister's assurance of a low level of rates. We accept that the Government have taken on board

some of our amendments and that they form a substantive part of the Bill. Indeed, there are whole new clauses within the Bill, and that is no mean achievement in a Bill which started with only six clauses. The Bill is less of a nonsense than when it started.
But I warn the Government that if the old system produced 100,000 appeals, I do not see this doing any better in its present state. It is causing worry, aggravation and ill-feeling. I urge the Government seriously, before it is too late, to reflect on what has been said tonight. For our part, we are willing to help, but if our warnings go unheeded, the Government have only themselves to blame for the ensuing chaos.

12.50 a.m.

Mr. Giles Shaw: The Government have an unenviable record on matters concerning the caravan industry. The manufacturing side of it is suffering under 25 per cent. VAT which is causing severe difficulties. A major component manufacturer has his business in my constituency. Retailers have suffered likewise. Now the Government have introduced changes in the rating system.
Throughout discussion of the amendments the Government have clearly been concerned with simplicity in valuation and in the collection of rates. It should be a tenet of any Government, but particularly of the present one, to recognise that the individual is extremely sensitive about rates, whether he is a house owner or a caravanner.

Mr. Tony Durant: On a point of order, Mr. Deputy Speaker. Is it possible for you to restore order so that I may hear what my hon. Friend is saying?

Mr. Deputy Speaker: I could hear the hon. Gentleman loud and clear.

Mr. Shaw: I am grateful that, as always, my words are clear and honeyed on my lips, Mr. Deputy Speaker. There is, however, a considerable noise from Labour Members sitting below the Gangway who obviously take no interest in the affairs of the caravanners in their constituencies.
I was dealing with sensitivity over rates. The individual caravanner, coming across these problems for the first time, will undoubtedly use every means


at his disposal to express his opinion and his anxiety—before the valuation court if necessary. There are few issues recently which have involved me personally in as much correspondence with my constituents as the actions of local authorities on Humberside and in parts of Yorkshire over rates. These areas are frequently used for caravanning by my constituents.

Mr. Ronald Brown: On a point of order, Mr. Deputy Speaker. Have you noticed the new style of Opposition which involves bringing cases and boxes of documents into the House? Is that not contrary to our rules, or have the rules been changed?

Mr. Deputy Speaker: I have not seen any boxes or cases. We are all warned, of course, to keep a sharp eye out for such things in other contexts. I can see nothing that is out of order.

Mr. Brown: Further to that point of order, Mr. Deputy Speaker. May I draw your attention to the Opposition Front Bench where you will see a green box and a case, which is, I believe, contrary to the terms of the relevant Standing Order?

Mr. Deputy Speaker: I can now see the box in question. It seems to me not very different from certain other boxes which may be seen here next week. I doubt whether there is much to complain about.

Mr. Shaw: After that short episode of shadow boxing perhaps I may now return to the main theme of the debate, Mr. Deputy Speaker.
I have heard no mention of the possible application under the Bill of water authority rates on caravan sites. I am well aware as are all ratepayers, that charges levied by the water authorities and collected by the local authorities will form an increasingly large burden on the rates, particularly in view of the recent legislation affecting those who do not have direct sewerage systems. This may mean that the caravanner is especially vulnerable. The consequences are that local authorities will be encouraged to levy substantial extra charges to recover the losses being sustained by the water authorities. I understand the Government's reasons for wishing to rate caravan

sites, but the prospect of increasing charges from water rates collected by local authorities will add to the burden on the caravanner.
The cumulative effect of these changes will discourage many of those who have found caravanning for substantial periods of the year to be one of the most enjoyable and easiest forms of taking holidays and recreation.
I understand the Government's desire to rate semi-permanent homes, but we have within the Bill all the seeds of discord and difficulty which my hon. Friends have pointed out to the Government on many separate occasions. Therefore, while we shall undoubtedly witness the Bill's passage tonight, it is with regret that we see opportunities missed to make a clean sweep of the problem and to reestablish the view that the citizen who has a caravan is entitled to protection and is not regarded as getting away with charges and costs on the cheap.
I hope that the Government will not find it impossible to handle the complaints and appeals which will indeed be made. I feel certain that the numbers of such appeals will be great and that part of the problem will have been occasioned by this Bill.

12.57 a.m.

Mr. George Reid: There have been times during the remarkably speedy passage of this Bill through the Commons when I felt tempted to suggest that the Minister of State at the Scottish Office should take a night off, find a friendly caravan park owner and bed himself down in a leisure van somewhere in the wilds of Scotland. Only a personal experience of that kind will indicate how difficult and complex the issue of caravan rating is. Perhaps as he wandered round the stances in the gloaming, he might have reflected on the two main characteristics of the Bill—first, the incredible speed with which its passage had been effected; and, secondly, the way in which the original Scottish proposals have been hacked apart, with one clause disappearing altogether and a totally new one making its emergence.
Is the reason that the Scottish Office draftsman, unlike his English equivalent, did not understand, when the Bill first came forward, how distinctive Scottish valuation and rating procedures were?
On Second Reading I suggested that there was no case for a Scottish Bill—for reasons which I still believe to be true and will come to later—or, if there had to be Scottish changes, that those should be the subject of a separate Scottish Bill. Not least among my reasons was that Scottish local government and valuation procedures are currently in the melting pot. Unlike our English colleagues, we have gone through local government changes more recently. We are shortly to have a Scottish Assembly. In that situation, and with Layfield round the corner, it would seem right to let matters rest until the Assembly arrives.
It has been argued that the leading cases in Scotland and England—Red-gates Caravan Park Ltd. v. Assessor for Ayrshire and Field Place Caravan Park Ltd. v. Harding—proceeded on totally different grounds. As one assessor put it——

Mr. Robert Hughes: On a point of order, Mr. Deputy Speaker. I understand that this is a Third, not a Second, Reading debate. Is the hon. Gentleman's speech in line with what is in the Bill or with his Second Reading speech, of which he appears to be giving us a rehash?

Mr. Deputy Speaker: I hope that the hon. Gentleman will bear in mind that it is only the content of the Bill to which he may now refer.

Mr. Reid: Yes, Mr. Deputy Speaker. For that reason I would quote what one assessor in Scotland said about the Bill:
It just won't do to legislate for the English conditions and try to convert directly into Scottish terms.
Throughout the passage of the Bill, the Minister of State, Scottish Office, having produced the Bill in its present form, has hovered very delicately between defending his Scottishness and at the same time indicating that, despite the different valuation and rating procedures, there was in essence no difference between the intent of the legislation north and south of the border. The Bill as it now stands and the Scottish clauses, drafted in haste and perhaps repented at leisure, still pose certain problems north of the border. The Minister has been at pains constantly to stress that the Bill has been demanded by Scottish authorities and the assessors. If that were so, why should

we Opposition Members receive so many appeals from Scots assessors, and the many letters which have been quoted repeatedly?
Let me concede this to the Treasury Bench—the Bill has certainly been rendered a good deal more tolerable in its passage through Committee. There is now provision for detailed information to go to owners of leisure vans which are to be taken out of individual rating. Secondly, given the mandatory approach, the transitional procedures under Clause 5 go a long way to satisfying the objections of the Law Society of Scotland that park operators should not be disadvantaged.
We still have broad objections of principle, and I think that the Bill will run into difficulties in Scotland. If there have been difficulties for assessors in time past in determining the value of stances—in relation to sea views, water pipes, and the nearness to toilets—these difficulties will continue, as the Bill now stands, for the park operator. If it has been difficult in time past for the assessor to determine the ownership of vans because they have been moved, it will be equally difficult for the park operator to determine whose ownership the vans are in. There is another problem of what happens in cases of empty stances. There will be a continuing friction between park operators and caravan owners.
My own position is that I do not believe that leisure caravans should be rated. If touring vans are not rated, though they can be left in a lay-by or in the driveway of a house for substantial periods, I do not see why that section of the community that cannot afford fuel bills, often the elderly, whose sole chance of a seaside holiday is a caravan, should be rated in the way that the Bill provides.
In view of the recent reorganisation of local government and the forthcoming Scots Assembly—I think it is commonly admitted that the two cannot co-exist—it would have been better to leave things as they were. I opposed the Scots clauses in Committee. I shall not do so tonight. However, the Bill would have been better if we had got rid of Clauses 3, 4 and 5, and at the very end, in Clause 7(2), after the words "Northern Ireland", had inserted the words "and Scotland".

1.3 a.m.

Mr. Cope: The Bill is interesting in that its origin arises from the court case that caused a lot of uncertainty and difficulty among caravanners. However, the Bill does not deal with the problem to which the court case gave rise. All that the Bill does, as those who have been following the debates are well aware, is to enable a caravan site to be rated as a single hereditament.
The question to which I wish to address my remarks is whether that will increase or decrease the actual rates paid by caravanners. That is the question in which caravanners are interested. Their rates were increased as a result of the court decision, but the reason for the increase was not the fact that they were assessed separately from the unit as a whole; it was that leisure caravans were assessed for the first time. That problem is not dealt with by the Bill. The only matter to which the Bill addresses itself is the assessment as a single unit.
In an emotional outburst earlier, the Under-Secretary went on about how the Bill was to be of great advantage to caravanners, and he stated that I was wrong in what I had said earlier—that the valuation of the site as a single unit would be the same as or greater than the sum of the individual parts. He did not argue that I was wrong. He merely stated that I was wrong. He stated that he had been advised that I was wrong. He used no arguments to try to demonstrate that I was wrong. He did not attempt to review the arguments that I had used in an attempt to show that I might at least be right in my contention.
I ask the Minister of State, Scottish Office—the Under-Secretary of State for the Environment seems to have drifted off into the night—whether he can produce any arguments to support his hon. Friend's contention that the sum of the parts would come to more than the whole. That is not the fact in normal valuation for other purposes, especially for tax purposes.
The Minister of State and myself are both accountants. We both have experience of operating the tax law and valuations under it. I ask him whether he can produce another example where the valuation of a group of items as a single composite whole comes out at less than the sum of the value of the

parts. I have tried to think of such an example and I cannot do so. Maybe the hon. Gentleman, who is a more experienced accountant than myself, can think of one. Maybe he can demonstrate that I am not correct in my contention.
I believe that the Bill will tend to increase the rates of individual caravanners unless they take the option of going for separate assessment. I understand that they can do so if they wish. I believe that many of them, if they consider the matter carefully, will follow that course. It will be a difficult course for them to follow through and they may not think it worth while. However, I think it is worth while that they investigate whether they should do so. This is the nub of the Bill. It is the point which will or will not commend it to caravanners.
The Bill commends itself to the administrators, the Inland Revenue, the valuation officers and the local authorities. I am all for efficiency of administration, I am all for easing the administrative burden of local authorities, but we must recognise what we are doing by easing their burden. It seems that their burden is being lifted at the expense of caravanners and site operators. The operators will have to carry out the same split of valuations among their site tenants that the valuation officers and local authorities carry out under the present arrangements.
It is a Bill of dubious value. It is not of the value that caravanners expected it would be when they first heard about it. They assumed that it would be to their advantage and that it would reverse the court case that had given rise to their difficulties last year. It seems that the Bill misled some of them into thinking that it goes nearer to the root of their problems than in fact it does.

Mr. Deputy Speaker: Before I call the next speaker, I should like to add to what I said on the point of order raised by the hon. Member for Hackney, South and Shoreditch (Mr. Brown). I have had my attention drawn to the Official Report for 9th April 1952, at column 2749, where the hon. Gentleman and others will find a comprehensive ruling given by the then Mr. Speaker covering all sorts of articles, including eggs. It may be that the point drawn to my attention by the hon. Gentleman is one at which Mr. Speaker would


like to look. I shall draw his attention to the matter tomorrow.

1.11 a.m.

Mr. Mudd: My hon. Friend the Member for Gloucestershire, South (Mr. Cope) has referred to the Bill as being of dubious value. I suggest that it is a Bill that flirts with the problem but does not make an honest woman out of the situation in that it achieves no solution.
It leaves caravan owners and site operators with four major defects, one false assumption and one premature ejaculation. Dealing with the four defects, there is first no specific liability placed on the site operator to refund any rate rebate or repayment to the caravan owner who has paid it in the first place. Secondly, there is no protection in the matter of agreements already entered into. Thirdly, there is no safeguard for caravan owners if the site operator, having collected, defaults or goes bankrupt, having in his hands the money which he holds in their name.
An additional major defect is the complicated situation whereby, although it will be up to the local authority to take a defaulting caravan site operator to the magistrates' court to recover money due, the onus might ultimately be placed on caravan site operators to take individual owners to the county court.
The false assumption is that a holiday caravan can somehow miraculously be regarded in exactly the same light as any other form of second home. But there is a basic difference. While a second home, such as a cottage, house, or a bungalow steadily increases in value, a caravan tends to suffer a marked depreciation in annual value, with a diminishing resale value. Therefore, it cannot be said to be regarded in the same way as can a second home.
Let me deal with the point of premature ejaculation—

Mr. James Lamond: Withdraw.

Mr. Mudd: The Bill is premature in that it overlooks the imminence, as one hopes, of the publication of the Layfield Report. Therefore, it appears that this legislation will merely bolster up a totally unacceptable rating system rather than look realistically at alternatives.
The Bill has now become a hasty, expensive, confusing and needless piece of legislation that can lead only to more confusion and an unacceptable situation—a situation which, if nothing else, will lead to a vastly increased work load for local government staff in dealing with requests for separate assessments and appeals.
Together with many of my hon. Friends and many Government Back Benchers, I have been transfixed by seven hours of deliberation in Committee, three hours on Report, and a further one-and-a-quarter hours on Third Reading. I wish to recall one statement made by the Under-Secretary of State for the Environment on 23rd March, when he said:
We send so many bits of paper to local authorities that they have to employ more staff to read the bits of paper that we send them about not employing more staff."—[Official Report, Standing Committee B, 23rd March 1976; c. 129.]
The philosophy behind the Bill is the same as that displayed by the Minister, who clearly takes that kind of attitude towards employment in local government service.

1.15 a.m.

Mr. Michael Latham: I shall not attempt to follow the imagery of my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd). That is obviously to the disappointment of the House, but I lack the lithe tongue and other things my hon. Friend obviously possesses.
At this stage, we are concerned only with what is in the Bill and not with what we would like to be in it. I have made clear at every stage that I am opposed to the Bill. I do not agree with the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) that it has been improved in Committee. It remains a very bad Bill.
I wish to refer only to Clause 1(7) and separate assessments. We still have inadequate evidence to give guidance to our constituents on this matter. In Committee, the Under-Secretary said:
On the figures we have, it would be an exception for a person not to benefit by the single site assessment."—[Official Report, Standing Committee B, 16th March 1976; c. 22.]
If the Government have figures, they should have given them to the Committee and the House. They have not done so


and we must take them on trust. I am not used to taking the Government on trust, even at this late hour, and I do not intend to do so now. The figures should be published as soon as possible.
I am still disturbed about the sort of practices that are likely to take place as a result of this Bill. The National Association of Caravan Owners has given me a copy of an agreement between a caravan company, which I shall not name—

Mr. Ronald Brown: Name it.

Mr. Latham: I do not think it fair to name the company.

Mr. Ronald Brown: Then we shall have to take the hon. Member on trust.

Mr. Latham: I am not the Government. Back Benchers are sometimes easier to take on trust because Governments stand or fall on their statements while Back Benchers are responsible only to themselves and their constituents. The agreement says:
If the Caravan Owner shall:—(i) fail to pay the balance due under this Agreement when demanded by the Company or (ii) Openly disagree with the Company or its site Managers or Agents over site policy … Then in any such case, this Agreement shall terminate and the Company shall be at liberty to remove the Caravan Owner's van from the site to storage …
and a lot more in same vein. When I see such agreements, I am concerned about the future implications of the Bill and the site assessment procedure.
I am also concerned when, for example, a letter is written to the General Secretary of the Association saying,
I am writing to let you know that the camp owner has put the rates on the site rent, and if we say anything about it, he would say if he wasn't satisfied to take the van off the field.
That is one of many specific examples given by the hon. Member for Derby, North (Mr. Whitehead) and hon. Members on this side of the House.
I am also concerned about the whole basis of the site assessment system. No doubt many people will wish to exercise their right to separate assessments, at least to see whether the Under-Secretary is right in saying that they will be higher than overall site assessments. We have not been given the evidence and I do not necessarily believe it to be true.
This is a bad Bill and I am sorry that it has got so far in this House.

1.19 a.m.

Mr. Moate: I agree that this is a bad Bill. I would go further. It is one of the daftest pieces of legislation brought before the House this year—and that is saying something. It stems from a fundamental misunderstanding by the Under-Secretary when he faced the undoubted problem of caravan rating.
In an Adjournment debate last year, I urged that action should be taken because district councils, including the authority in my constituency, had the intolerable problem of suddenly being faced with having to send out 250,000 rate demands to caravanners all over the country. It imposed an enormous strain on these councils. Nearly 100,000 caravanners appealed against those assessments, and many appeals are still outstanding.
Instead of returning to the pre-1966 position, the Government introduced this foolish measure to extend the rating system, which is already subject to criticism and creaking under the strains. The rating system is the subject of an inquiry and is likely to be substantially altered soon. The Government decided to extend that system to caravans—not to caravans kept at home and taken out at weekends but to caravans which remain on permanent sites. From that decision flows this legislation which will land the Government in even more trouble in the coming year.
The Government have hardly listened to what was said in Committee and on Report, but they will see in the coming year that what we said is true. As individual caravanners opt for individual assessments in vast numbers, the Government will find themselves in the position they were in before they introduced the legislation, and they will bitterly regret having taken that decision.
The Minister said that he could not go back to the pre-1966 position because he thought that caravan owners should pay rates. He could have avoided this complex legislation and all his troubles by opting for simple legislation to set the clock back prior to 1966. Caravanners already pay some tax. They have always contributed to the rates for the pitch and the communal facilities provided by


site operators. The rates they paid contributed substantially indirectly to the revenue of the districts in which the camps were sited. If the Government decided to have a heavier tax on caravans we could debate that decision, but it should not be introduced in this way. One could argue for a tax, perhaps a flat licence charge, but not for rates. This is daft legislation because it extends to caravans the rating system, which is already in a state of collapse and contains many nonsenses and contradictions.
My hon. Friend the Member for Melton (Mr. Latham) asked the Minister to have the courtesy to write to him to say whether the Bill allows all caravanners to pay rates by instalments. The Minister, who is always courteous, will write to my hon. Friend, but that is not satisfactory for other hon. Members and the general public. I hope that the Minister will give us a straight answer tonight.
The Bill might ease the burden on district councils, which are grossly overburdened. It will impose unfair penalties on site operators. It will be bitterly regretted by 250,000 caravanners. Because of those last two considerations it should be rejected. Even the proposition that it will help district councils has yet to be proved. If in a few months' time more applications are made for individual assessment and there are more appeals, we could be repeating this debate. There will be Adjournment debates on this subject and letters will flow in to the Minister. It will be seen that our opposition to the Bill was right and that the Government were wrong. For that reason I hope that hon. Members will join me in voting against Third Reading.

1.25 a.m.

Mr. Wyn Roberts: As one who has followed the progress of the Bill very closely through the House, I think I am entitled to bid it farewell in a Third Reading speech.
In our Second Reading debate, the Secretary of State for the Environment described the situation that has given rise to the Bill. It was a very frank account of the difficulties of valuing nearly a quarter of a million leisure caravans and of collecting rates from them afterwards. Such were its difficulties that the Government,

under pressure from the local rating authorities, decided to legislate.
The Under-Secretary of State, in the Second Reading debate, said that
most leisure caravans have been separately assessed".—[Official Report, 3rd March 1976; Vol. 906, c. 1327.]
But, as we know, some 90,000 caravanners appealed against their assessments. Presumably, these appeals could have been dealt with in time had the present Bill not been introduced. Therefore, the general picture is that the valuation office at least was coping moderately well with its part of the problem, but, of course, as we know, not the local authorities. Their early anticipation of the problems of rate collection tended to be confirmed by their experience during the current year.
The chief executive of my own local authority put it to me as follows when he wrote, as early as 26th March last year:
Throughout many parts of the country, especially in the low-rated non-industrial tourist areas, the cost will far outweigh the benefit, and this at a time when the rating system is already creaking at the seams.
Later in the same letter, dealing with the question of identifying caravan owners and enforcing rate payment, he says:
They will be free to move from site to site each year and be virtually untraceable. The rateable value of the caravan will appear in the valuation list, inflating the total rateable value, with a consequent unbalanced reduction in the rate support grant. Rate support grant will therefore be lost and a large proportion of unpaid rates will have to be written off because of the problems of identification and enforcement.
Perhaps in view of the foregoing—which is, I believe, a fair example of the difficulties many district councils foresaw—the Association of District Councils welcomed the Bill in principle. Their main concern—which has been allayed, I hope, by the Under-Secretary of State—was that the single hereditament treatment should be applied throughout the land and not be too dependent on the discretion of the individual valuation officer. In any case, I believe that local authorities can make representations to their valuation officer if they think that the single hereditament policy should be applied in a particular site.
We have a situation, therefore, in which the valuation office and the rating authorities are reasonably satisfied with the content of the Bill, in that it reduces


their work and costs appreciably. The Government's dissatisfied customers, as so many of my hon. Friends have pointed out, are the site operators, who are burdened with extra duties and penalties under the Bill, and the caravanners who, instead of being confronted at their weekend visits with rate demands stuck to the tow-bar, have to pay their rates in advance as part of the site charge, which is usually levied before the rating year begins.
Both the site operators and the caravanners share the view that only pitches should be rated and that the caravans themselves should be excluded. This view has been consistently supported by my hon. Friends the Members for Melton (Mr. Latham) and Faversham (Mr. Moate). I do not recollect that the Government have ever answered their argument that this legislation should have overturned the High Court decision, which the Minister himself described as "very strange". It should have brought about the return of the old global system in its comparative purity and simplicity, and perhaps even at this eleventh hour the Government will deal with this fundamental question.
As for the site operators, we have sought all along to persuade the Government to release them from their duties under Clause 2, which we regard as more properly belonging to the valuation officers. About half-way through the Committee stage, the Minister of State, Scottish Office, saw the light and substituted the present Clause 4 for the Scottish equivalent of Clause 2. But the Under-Secretary of State for the Environment is unrepentant and, in England and Wales, the site operator remains the provider of rating information on pain of a fine of £50.
I am bound to say yet again that we do not like Clause 2 at all, and that the hon. Gentleman will rue the day when he failed to take advantage of our proposal that the English and Welsh procedure should be brought into line with the Scottish system.
As for the individual caravanner under this Bill, he will agree with us that any information about rates should be given to him by the rating authority and about rateable value by the district valuation officer. Those are the official sources.

Any information given by the site operator will be doubted and will lead to endless queries and disaffection. The Government do not seem to mind, as long as the authorities are not directly involved.
The Under-Secretary commended the Bill to the House on Second Reading for two reasons. The first, he said, was that
 … it will ensure that caravanners should, in general, be paying less in total next year than they would have been paying if they continued to pay rent and separate rates.
The Minister was obviously very careful in his choice of words. He talked of caravanners in general paying less in total. What does that mean? The caravan, currently separately assessed, bears a domestic rate and full rate relief. But the site charge must contain an element which covers the commercial rate of other parts of the site. In future, with mixed hereditament rating of single hereditaments, the individual caravan will have domestic relief on only half the rate. But as the whole rate will be buried in the site charge, I cannot see how anyone can prove or disprove whether the Minister is right or wrong in what he says about caravanners paying less under the new system.
The second reason that the Minister gave for commending the Bill was:
It will also prevent a significant increase in local authority expenditure in certain holiday areas which would certainly have arisen if leisure caravans continued to be separately rated."—[Official Report, 3rd March 1976; Vol. 906, c. 1331.]
We hope that the Bill will be successful in this.
Much as we approve of these objectives, such is our dissatisfaction with the means of achieving them through this Bill that I, for one, cannot support the Government, should a Division be called. The ends are good, but the means leave much to be desired.

1.33 a.m.

Mr. Millan: There have been complaints about this Bill being rushed through. Listening to tonight's debates, it did not seem to me that the Bill was being rushed through.
I want to answer one or two of the points which have been made on Third Reading, without going back over the Second Reading debate again. The hon.


Member for Northampton, South (Mr. Morris) read quite a substantial chunk of my speech on Second Reading, and I do not think that I can improve on that now.
We made it clear that we took the decision that we would not reverse the decisions which had been made by the courts that leisure caravans were rateable. That is not extending the rating system. It is simply accepting what the legal position has been defined to be. But a very serious practical problem was involved because of the large volume of individual rating notices, and the simple purpose of the Bill is to provide for a single unit of assessment.
Although that is the single purpose—and it is basically a simple purpose as well—in any matter of rating, naturally complications arise. It has been because of these complications that we have had an extended debate in Committee, on Report and on Third Reading.
With the various amendments that have been made we now have a Bill which meets the principal objectives we laid down and which eliminates this administratively cumbersome system, doing so in a way which is fair to the site operator and which gives the maximum amount of information to the individual caravanner so that he can judge whether he is being fairly treated in the changed circumstances.
I shall not go over the various provisions of the Bill. They have been substantially improved during the Bill's passage and I believe that we have now met our objectives. I shall answer two individual points that were raised in the Third Reading debate because, as you, Mr. Deputy Speaker, have pointed out, we are dealing only with what is in the Bill at this stage and not with what might have been in it.
The first point concerned whether the single valuation will be a lower valuation than taking all the individual valuations and adding them together. On a matter such as this we have to rely on the advice we get from the Valuation Office. That advice, very firmly, is that the single valuation will be lower, for certain technical

Division No. 103]
AYES
1.40 a.m.


Anderson, Donald
Boardman, H.
Campbell, Ian


Archer, Peter
Bray, Dr Jeremy
Clemitson, Ivor


Armstrong, Ernest
Brown, Ronald (Hackney S)
Cocks, Michael (Bristol S)


Bates, Alt
Buchan, Norman
Coleman, Donald


Blenkinsop, Arthur
Callaghan, Jim (Middleton &amp;c P)
Concannon, J. D.

reasons which I am not able to explain in detail. The principal reason for the reduction is that the single assessment will be done on the basis that what is being rated is, in effect, a business enterprise and in those circumstances there has to be assumed a certain incentive to the site operator to run the site as a business enterprise. That in turn, leads to certain deductions which give a reduced valuation compared with the single valuations added together. That is the basic reason why there will be a reduced valuation. That is the advice which we have had from the Valuation Office and the people there will be providing the valuations.

The other point I was asked about concerned the payment of rates by instalments by the caravanner. The important point to recognise here is that the individual caravanner is no longer the ratepayer. The ratepayer is the site operator and therefore the provisions about payment by instalments attach to him, not to the individual caravan owner.

In England at least—it is less so in Scotland—the provisions here are rather complex. The site operator will be able to pay by instalments if he meets the conditions in the rating legislation. The individual caravan owner will not be paying the rates direct. If he is paying, in effect, his share of the rate burden through the rent he pays, it is matter for him to agree with the site operator, on the payment of rent generally, whether there should be some spreading of the burden. Because he is not the ratepayer he cannot have the right to pay rates by instalments.

Many words have been spoken tonight. I do not believe that they have damaged the essential objectives of the Bill, or, indeed, the way in which the Government have chosen to achieve those objectives. It is on that basis that I commend the Bill to the House.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 100, Noes 10.

Crawshaw, Richard
Jones, Barry (East Flint)
Sedgemore, Brian


Cryer, Bob
Judd, Frank
Sheldon, Robert (Ashton-u-Lyne)


Cunningham, Dr J. (Whiten)
Kerr, Russell
Silkin, Rt Hon John (Deptford)


Dalyell, Tam
Lamond, James
Silkin, Rt Hon S. C. (Dulwich)


Dempsey, James
Latham, Arthur (Paddington)
Skinner, Dennis


Dunnett, Jack
McElhone, Frank
Small, William


Eadie, Alex
Mackenzie, Gregor
Smith, John (N Lanarkshire)


Ellis, John (Brigg & Scun)
McNamara, Kevin
Snape, Peter


Evans, loan (Abordare)
Madel, David
Spearing, Nigel


Evans, John (Newton)
Marks, Kenneth
Stallard, A. W.


Ewlng, Harry (Stirling)
Marshall, Dr Edmund (Goole)
Stoddart, David


Faulds, Andrew
Mendelson, John
Taylor, Mrs Ann (Bolton W)


Fernyhough, Rt Hon E
Millan, Bruce
Thomas, Ron (Bristol NW)


Fletcher, Raymond (Ilkeston)
Miller, Dr M. S. (E Kilbride)
Tlnn, James


Fowler, Gerald (The Wrekln)
Molloy, William
Urwin, T. W.


George, Bruce
Murray, Rt Hon Ronald King
Walnwright, Edwin (Dearne V)


Gilbert, Dr John
Noble, Mike
Walker, Terry (Kingswood)


Golding, John
Oakes, Gordon
Ward, Michael


Grocott, Bruce
Orbach, Maurice
White, Frank R. (Bury)


Hamilton, James (Bothwell)
Ovenden, John
White, James (Pollok)


Hardy, Peter
Palmer, Arthur
Whitehead, Phillip


Harper, Joseph
Pavitt, Laurie
Williams, Alan (Swansea W)


Harrison, Walter (Wakefield)
Pendry, Tom
Wise, Mrs Audrey


Hart, Rt Hon Judith
Price, William (Rugby)
Woodall, Alec


Hughes, Robert (Aberdeen N)
Robinson, Geoffrey
Woof, Robert


Hunter, Adam
Roderick, Caerwyn
Young, David (Bolton E)


Irving, Rt Hon S. (Dart(ord)
Rodgers. George (Chorley)
TELLERS FOR THE AYES:


Janner, Greville
Roper, John Rowlands, Ted
Mr. James A. Dunn and


John, Brynmor
Mr. J. D. Dormand



Jones, Alec (Rhondda)






NOES


Bottomley, Peter
Penhallgon, David
TELLERS FOR THE NOES:


Fairgrieve, Russell
Reid, George
Mr. Roger Moate and


Johnston, Russell (Inverness)
Ridley, Hon Nicholas
Mr. David Mudd


Latham, Michael (Melton)
Ross, Stephen (Isle of Wight)



Lawson, Nigel
Shaw, Giles (Pudsey)

Question accordingly agreed to.

Bill read the Third time and passed, with amendments.

FIDUCIARY NOTE ISSUE

1.50 a.m.

Mr. Nigel Lawson: I beg to move,
That the Fiduciary Note Issue (Extension of Period) Order 1976 (S.I., 1976, No. 232), dated 17th February 1976, a copy of which was laid before this House on 20th February, be withdrawn.
This motion is known to the procedural experts, of whom I am not one, as an out-of-time Prayer. Although my right hon. and hon. Friends and I put down a Prayer to annul the Order at the earliest possible opportunity, the usual channels were unable to find time to debate it before the statutory 40 days ran out yesterday. Moreover, had they not run out, we should not have been able to debate the matter even now, at this uncivilised hour, since the iniquitous 11.30 p.m. rule would have applied. Although I do want to detract from the great importance of the issue which the House has been debating for the past three hours or so, the treatment afforded to a

matter as important as this Order is a negation of the power of Parliament. I know that it applies to all legislation subject to the negative resolution procedure, but it seems particularly scandalous when applied to an Order as important as this.
Orders like this are laid every two years, but since, surprisingly, this is the first time that one has been debated since 1962, it might be as well to preface the argument for its withdrawal with some explanation.
The 1954 Currency and Bank Notes Act, which was the successor to a number of earlier Acts of much the same name, ostensibly limited the size of the fiduciary note issue to £1,575 million. In fact the fiduciary note issue, which to all intents and purposes means the total note issue—although it is as well to be reminded by the word "fiduciary" that the value of the notes represents the faith and confidence that we have in the Government—now stands at about £6,000 million, almost four times the prescribed size. This has come about because the Act allows the limit to be exceded by Order for a renewable period of two years, subject only to Treasury minutes, which we can neither debate nor vote upon. Each of these minutes is valid for


a maximum of six months, although this seems rather academic.
I shall be putting a number of questions to the Financial Secretary, of which perhaps the least important, although still not without interest, is this. How many of these Treasury minutes have been issued under that Act during the past 12 months? The researches of our admirable House of Commons Library suggest that there have been about 90, implying that each has an average life of four days. That shows how far we have already departed from the thinking behind the 1954 Act.
Be that as it may, the sole theoretical power of Parliament is that once every two years we can reduce the note issue—not by 1 per cent. or 2 per cent. or 5 per cent. or 10 per cent.—but to the 1954 figure of £1,575 million. Today, that would imply a reduction of about 75 per cent. It is a power so inflexibly Draconian as to be virtually unusable. So much then for the pretence in which Treasury Ministers persist, that Parliament has retained control over the growth of the note issue.
But the 1954 Act was in many ways an anachronoism at the time that it was made law. Before the First World War, when we were on the gold standard, the size of the fiduciary note issue at least measured the extent to which the Government of the day departed from that, on the whole, highly beneficient standard. It was right that Parliament should be required to approve the scale of any such departure. But by 1954 we had long since left the gold standard, and the extent of the Government's departure from it was no longer susceptible to measurement because it was total. That in no way abated the importance of monetary policy, above all if inflation were to be avoided, and the note issue was obviously the most basic form of money, so that it was wholly logical that during the brief Committee stage of the 1954 Bill my right hon and noble Friend, Lord Boyd-Carpenter, then the present Financial Secretary's predecessor by several removes in that important position, discussing the sort of Order we have before us, should have said:
 … an Order of this kind may give a considerable opportunity for debate in either House, not with the intention of solemnly reducing the size of the fiduciary issue by an arbitrary act, but to allow analysis of the

policy of the Government. That would be most conveniently effected on this Order."—[Official Report, 26th January 1954; Vol. 522, c. 1691.]
That is our purpose tonight—to ask some fundamental questions about Government monetary policy. It is a striking fact that despite the undoubted importance of monetary policy, which is conceded, at least in principle, by the Chancellor of the Exchequer, there is no other significant opportunity to debate it in the entire parliamentary calendar. This is the only time we have.
Thus, for example, in 1971, when the Bank of England promulgated, with the approval of the Treasury, the crucially important new doctrine of Competition and Credit Control, so far as I know it was not debated in this House, nor, incidentally, if I may say so, did the Labour Party take the opportunity presented by the 1972 predecessor to the present Order to instigate any kind of debate on monetary policy in general or on Competition and Credit Control in particular.
But before raising the wider issues, we should pause for a moment to consider the views of the small but dogged minority who hold that inflation could be brought under control simply by curbing the size of the note issue itself. In its most logical and literal sense, that proposition is palpably mistaken. If, overnight, all who worked were paid by cheque and all who went shopping paid by credit card, there would be a sharp drop in the demand for banknotes demand and this is the size of the note issue, but inflation would be in no way abated.
The orthodox view that the size of the note issue is essentially a symptom rather than the cause of inflation is strictly correct, but the standard Treasury objection to the note issue school is surely overstated, because it is hard to hold that the note issue is of no importance whatever and then to maintain, as was maintained by Lord Boyd-Carpenter on Second Reading of the 1954 Bill, on 3rd December 1953 that
the consequences of the annulment of a Treasury order raising the level of the note issue could be very serious. It is, of course, clear that if we were to allow such a thing to happen it might cause quite a considerable dislocation of business."—[Official Report, 3rd December 1953; Vol. 521, c. 1379.]
Therefore, it does not seem that the note issue is of no importance whatever. It


is clear that if that sort of thing is a consequence, it is something which might lead a Treasury and a Government to think twice before inflating the money supply.
It seems to me that the real reason for the persistent Government hostility to parliamentary control of the note issue is, at bottom, a hostility to any parliamentary control over any form of monetary policy. Parliamentary control over monetary policy means in practice that the policy would be expected to follow certain rules, whether they be rules of the gold standard or rules for a certain increase in the money supply as propounded by Professor Friedman or in the ideas of Professor Hayek. Parliament would be asked to approve derogations from these rules in exceptional circumstances.
The question at the bottom of this is whether the Government are prepared to accept any external constraints on their actions on monetary matters. That probably applies to a wide area than just monetary policy. However, if the desirability of parliamentary control were conceded, the problem of the inadequacy of the note issue as the prime method of control could of course be met.
The Macmillan Report in 1931 said, in paragraph 323,
an expansion in the active note issue is likely to be a result of active trade ensuing with an apppreciable interval after an expansion in the Bank's
—that is the Bank of England—
 deposits. Thus it is the latter which is now the factor of dominating importance, and the somewhat anomalous position arises that while the Bank is not regulated by law in respect of its deposits it remains so regulated in respect of the note issue".
There is nothing to stop the Financial Secretary suggesting that perhaps it might be the clearing bank deposits with the Bank of England which should be subject to regulation because that is a more important kind of cash than the note issue. Perhaps the hon. Gentleman will give us his views on that policy and on the alternative suggestion put forward on the Second Reading of the Currency and Bank Notes Bill by the right hon. Member for Battersea, North (Mr. Jay) who is a distinguished former City editor. I am sure that the Financial Secretary believes that as such the right hon. Gentleman should be listened to. He said,
We cannot, of course, in this Bill establish the same Parliamentary control over bank

credit as we have over the note issue. But I cannot help thinking that the whole question of the control of bank credit is one which Parliament may have to examine in the future."—[Official Report, 3rd December 1953; Vol. 521, c. 1375.]
The Treasury has had a little over 22 years since then to think over the ways in which Parliament might exercise this control. I should be grateful if the hon. Gentleman would give us the benefit of the Treasury's ponderings on this matter.
At present control of the money supply is left entirely at the discretion of the Government. The case for the motion is that the Government have failed to come clean about their intentions on how they propose to exercise that discretion and by what rules and guide lines. We do not know what the Government are seeking to control. We know that they are concerned with controlling the money supply—or so they say—but we do not know whether they are satisfied with the control of bank credit.
Many people have looked at this matter very carefully. Professor Laidler is one. I draw the Financial Secretary's attention to the evidence which he gave on 7th April last year to the Expenditure Committee when he said that the absence of control—I shall paraphrase his words in order to save time—of bank deposits through the old cash ratio, and its replacement by a much more complicated system, led to a much reduced control of the creation of money in the banking system by the Bank of England. He felt that a monetary policy and control of the money supply could not be regained until we had something much closer to the old system of cash ratio control of the joint stock banks.
Indeed, that is considered as very important in the United States where it is sometimes called high-powered money or the monetary base. I know that the hon. Member for Stoke-on-Trent, Central (Mr. Cant) is an expert on this matter, and he will no doubt contribute to the debate and tell us more about it.
I should like to know whether the Government believe that this form of money—high-powered money, which is basically the notes in private circulation and the banks' deposits at the Bank of England—is what needs to be controlled. Indeed, is the Financial Secretary satisfied with the present system of controlling the money-creating mechanism of the clearing banks?
If the hon. Gentleman does not consider that a worry, the question still remains—what do the Government believe is the most important of the monetary aggregates? Is it Ml? Is it M3? Is it M2, which is not even published, although I notice that Messrs. Greenwells, in their latest bulletin, say that it is the most important and that it should be looked at and, indeed, published? Is it a mixture or an average of the three? By what yardstick do the Government judge whether their monetary policy is right or wrong? Do they look at the growth of the money supply in monetary or in real terms adjusted for the rate of inflation?
In the United States the Federal Reserve is required by law to publish its precise monetary objectives both in general and for the coming year. That might not be a bad idea here, too.
In the meantime, will the Financial Secretary tell the House what the Government's objectives are in precise terms? What is the target rate of growth of the money supply for the coming year? If the hon. Gentleman is not prepared to tell the House—I hope that he will—I feel sure that, before long, he will be asked to spell it out to the International Monetary Fund.
Does the sharp increase in the growth of the money supply last month to between 8 per cent. and 16 per cent. at an annual rate, depending on what monetary aggregate one takes, represent a change of policy? Is this rate of growth of the money supply to be continued? If not, what is to happen?
I think that Parliament is entitled to put these questions and to have them answered. We are talking about something of central importance. We are talking about the Government's monopoly to print money, which is of the essence of sovereignty and nationhood. We are talking about parliamentary control of the creation of money, which is the historic essence of Parliament's power and the traditional source of that power. Indeed, we are talking about the struggle against inflation, which I think right hon. and hon. Members on both sides of the House are agreed is the most important issue facing this country at present.
I think that we would be entitled to answers to all these questions at any time,

but particularly now when we have an unprecedented public sector borrowing requirement. I do not know what it will be, but it looks as though it will be at least £10,000 million in the year that is now drawing to an end and probably about £12,000 million next year. This huge borrowing requirement is the inflationary, money creating, potential in the system. The frightening point is that how much of that is financed by genuine borrowing and how much is financed by the creation of money is, to a large extent, outside the Government's control.
Although the Government may genuinely say that they are prepared, whatever the conditions, to borrow sufficient to pursue a non-inflationary money supply policy, that may mean pushing up interest rates to such a level that they would not be able to go through with it, and, even if they were to go through with it, the policy would totally kill any hope of private investment. They are therefore in a situation that is fundamentally out of control, and out of control because of this vast inflationary overhang which the PSBR represents.
I have asked a number of questions. I hope that the Financial Secretary will answer them as precisely as possible. As for those that he cannot answer—and there may be one or two—it is essential that they are answered, and in terms, by the Chancellor of the Exchequer, fortified by his 38 votes, in the Budget Statement on Tuesday. I hope that the Financial Secretary will ask his right hon. Friend to answer any questions that he himself may be unable to answer tonight, because if there is to be any confidence, either at home or overseas, that the Government know what they are doing in the all-important battle against inflation, Parliament must be given an answer to these questions, which hitherto we have not received.

2.12 a.m.

Mr. R. B. Cant: I am an extremely moderate and reasonable man. I always find the speeches of the hon. Member for Blaby (Mr. Lawson) so charming and attractive, but tonight I cannot bring myself to start my speech in the way that I would have liked. To put it mildly, it is a piece of gross impertinence on the part of the hon. Member to make the


statement that he has made, although it has been learned, comprehensive and so forth, without reminding the House that to a very large extent our troubles in the context of general inflation, as well as in other economic ways, have arisen because of the policies, which I suppose we can call only by the phrase "dashes for growth", undertaken by Conservative Governments in 1963 and in 1971–72.
I say that because I think that history teaches us that once certain things happen in social and economic history, it is difficult to recover the past. This happens in connection with such things as levels of social expenditure, whether these are associated with wars, or general periods of rising expectations, and so on. We can reach the peaks, but we find it extremely difficult to descend from those in terms of expenditure. Similarly, it is so easy to generate a level of inflation and it is so difficult to get back to any sort of normal experience in this context.
Having said that, I want to make the point that for some years now I have been one of an esoteric band of people who have attached some significance to the fact that money stock, defined in one way or another, is important in the development of an economy. I know that this presents all sorts of difficulties of definition, and I do not want to enter into any detailed discussion of these particular questions. I merely accept the fact that if one argues that money stock is relevant, one must go on to talk about the importance, if one is arguing in a positive and dynamic sense, of the money supply being related not only to inflation but to the whole level of production and economic activity. This brings into question all sorts of problems relating to the velocity of circulation, monetary lags and whether or not at any given moment certain developments are significant for the money supply. Difficulties are presented, to which the hon. Gentleman has referred, as regards M1, M2 and M3.
In our postbags this morning we received a rather primitive graph from an organisation called RSI which was well designed to prove a certain point. It demonstrates in basic figures that since 1954 the cost of living index has increased three and a half times and that the issue of bank notes, whether they be fiduciary

or any other sort, has also increased three and a half times. It may be the most obvious conclusion that there is a fundamental relationship to which we should cling and that we should not get involved in all the later developments. Clearly those developments pose problems.
Is it adequate to think in terms of M1 and M3? Even they tell us a different story from time to time. Some say that we should expand. Some of the City institutions have indicated that we should introduce M2 because in these days the measure of liquidity that is implicit is much more significant and, therefore, much more relevant.
We have also to decide exactly what we are to do about bringing into the equation the impact of our balance of payments experience and our overseas borrowing. Learned people can prove that most of those matters, including the financing of balance of payments deficits and external borrowing, do not have a bearing on the money supply unless the person holding the debt of a current transaction happens to want it repaid in foreign currency. But without doubt that introduces another dimension into the whole area of the discussion if we are thinking about the impact of money supply on the development of the economy.

Mr. Ron Thomas: Will my hon. Friend say a little more about the velocity of circulation? Most of the studies that have been carried out suggest that there are difficulties in predicting what the velocity is or will be and in trying to predict the range. The difficulties are such that it becomes an economic tool which is not useless but pretty close to being useless.

Mr. Cant: This is one of the problems. There are certain purist exponents of the theory who argue that the velocity of circulation in the light of the history of some countries, especially of the United States, would appear to be much more of a constant than it is in other areas. That is a fascinating and rather crucial consideration when we are thinking of the relevance of this point. However, in view of the late hour, I shall move on to one other point.
Even in this country where it is difficult to apply monetary data, I believe that we should try to follow the Americans


a little more closely than we do in regard to the announcement of monetary targets. I realise that there are great difficulties in that respect for a reason which I shall mention in a moment. But if we do not do so, our policy will be apt to get into a state in which we shall not know where we are going.
A number of hon. Members mentioned our old friend, the public sector borrowing requirement. There is not the slightest doubt that we have a problem in that respect. If we assume that part of the problem is pure capital financing and assume that another part of the public sector borrowing requirement is related to this period of "slump-flation", a phenomenon that will disappear when we get out of these difficulties, we shall still have half of the £12 billion to which the hon. Member for Blaby referred as the inflationary overhang.
Again, without doubt, the Chancellor of the Exchequer is sustained in his battle against inflation by the peculiar savings ratio which has emerged in most industrial countries—surprising economists because they are still trying to find a reason for it. If there were any significant change in the situation, the Chancellor's problems would be very much greater. When he was asked about this on television or radio recently, he said "If that happened, I would feel very much like somebody who saw his mother-in-law driving his new car over the cliffs of Dover. It would be as frightening an experience as that." Yet in the immediate future this is something that might be of considerable importance.
What will my hon. Friend the Financial Secretary do about the situation? How far is it true that the increase in the February figures is due to the fact that the Chancellor of the Exchequer ran into a situation where he did not know what to do? He decided to stop issuing gilt-edged securities for a considerable time, but then in February he increased his borrowing through the banking system. Is there any connection between the increase in bank borrowing and the increase in money supply—or was this a calculated risk in which he wanted to see the pound sterling depreciated? Was one of the ways in which he thought he might achieve that end—apart from the bungling by the Bank of England, not by the

Treasury, of course—to let the rate of interest fall?
The Chancellor faces a fundamental dilemma. This is a great problem. One does not just pursue one target rigorously and devotedly in money supply, saying "There is another aspect of the problem. We must either reduce the rate of interest or lean on it to get it rather higher so that our public sector borrowing finance will be eased". I shall not continue on that score because I know that many other hon. Members wish to take part in the debate.
We should thank the Opposition for this debate because it is one of the rare occasions on which we can discuss more fundamental matters than merely adjusting tax rates up or down a little, even though social justice requires such action. We are faced with a difficult situation, but one thing is certain. If the future unfolds in such a way that the money supply increases beyond our control, that future will be less happy and bright than it would otherwise have been.

2.25 a.m.

Mr. J. Enoch Powell: The thoughful and expert speech of the hon. Member for Stoke-on-Trent, Central (Mr. Cant) has revealed that, once we turn over the stone of the fiduciary issue, we uncover one of the entrances to the underworld of not merely monetary but also economic policy and management.
Before I descend one or two steps into that underworld, it would be wrong of me to allow the occasion to pass without an acknowledgement of the appearance at the Dispatch Box of the hon. Member for Blaby (Mr. Lawson) to deliver a characteristically lucid and interesting speech. I am sure that it is because of his speech that, even at this hour, there is a attentive, if small, attendance. I trust that his appearance at that Box, even at this hour, is not due to the proverbial fact that when the cat is away, the mice play, but rather portends something of a more permanent character which we may be able to enjoy at what are conventionally described as more reasonable hours.
As the hon. Member for Blaby pointed out, this occasion is somewhat of a curiosity in a number of respects. The fact that we are praying against an Order out of hours is another reminder of the


manner in which the House has addled its procedure by a Standing Order first adopted in 1954. The present Lord Boyle of Handsworth and I argued against it then on the ground that, by snatching at an apparently attractive means of lightening our burden in the late or early hours, we should find sooner or later—and we have found it so for many years now—that the House was solemnly enacting a power to pray against subordinate legislation and then, by that Standing Order, depriving itself of the practical possibility of doing so, or at least depriving itself of that possibility with the able co-operation of the Government Whips. Sooner or later—and better sooner—we shall have to review the rather self-insulting manner in which we find ourselves unable to provide the opportunity envisaged by statute for debating and, if necessary, coming to a decision on subordinate legislation.
This Order is a curiosity in other respects. Long years have passed since anyone in this House held that the control exercised over the fiduciary issue had any practical leverage effect upon inflation, the economy or the operations of the Treasury. The hon. Member for Blaby pointed out the grotesque fact that, having 6,000 million currency notes in circulation, we solemnly consider every two years whether we ought to revert to a circulation of 1,500 million notes. This is based on legislation from 1954, and one is brought up sharply by the realisation that in 1954 it did not seem so grotesque to envisage that inflation might not be an on-going, accelerating phenomenon, but might be a fluctuating phenomenon.
The implication behind the provision which presents us with this Order is that upon the whole one would expect that the increase in the money supply would be a fluctuating rather than an on-going phenomenon, so different has experience in the last 22 years been from the environment in which one can recall we were still living in the first half of the 1960s. The year 1954 is not far from 1957. The Financial Secretary to the Treasury is to reply to the debate, and in 1957, as Financial Secretary to the Treasury, I was a member of what the hon. Member for Blaby in a slightly different context called a small but dogged minority who asserted, amid peals of

mocking laughter from all the best people, that perhaps money supply had something to do with inflation. This was dismissed as mere illiteracy. Presently the Radcliffe Report appeared, to explain that as velocity "V" was infinite there was no point in worrying about "M".
That tune is not played nowadays. Misusing that much misused model phrase, one might almost venture to say that we are all monetarists now, at any rate at some times and to some extent. One of the many new monetarists—one of the classic new monetarists—is the Prime Minister who, to his very latest moment, has rejoiced on Tuesdays and Thursdays in reminding the House of Commons that under the previous Conservative Administration, with disastrously inflationary consequences, the net borrowing requirement which they had allowed to emerge was financed by printing money. No one is a more strict monetarist than is the outgoing Prime Minister when he is engaged in that hunt.
In the fiduciary issue, this tiny proportion of the total sum of money, however defined, we are contemplating the tombstone of past inflation. We are contemplating the outer ring upon the sand of the advancing tide of inflation. How apt was the hon. Member for Stoke-on-Trent, Central when he reminded us of the wretched phenomenon—with which we seem to live in this aspect, as in so many aspects, of modern experience—of a one-way pendulum in public expenditure, net borrowing requirement, perhaps the money supply, inflation itself. It seems to swing only in one direction.
No one would seriously imagine that, summoning the utmost resources of opposition, we would go into the Lobby tonight to force the fiduciary issue back to the £1,500 million limit of 1954 with the notion that that would be a limit and control upon inflation. One might as well try to turn a flood back to its source by baling out the furthest drops as it flowed down to the foot of the hills, for the fiduciary issue is the ultimate deposit of the initial causes of monetary expansion. That is why the debate has, rightly, brought us to the question of the cause and the mechanics of monetary expansion.
Adding to the tasks which have already been prescribed for the Fiancial Secretary, I hope that he will give a brief child's guide to the real mechanism which lies behind the process which we all gaily describe and think we understand as "printing money". "They printed money", says the Prime Minister, pointing a minatory finger at the Opposition. The net borrowing requirement brings with it, we all say, a constant threat that the Government will be forced into printing money.
There ought to be a little clearer understanding, even in this place, of the process of the monetisation of debt—the process whereby the borrowing of Government from the banking system produces ultimately the result of an expansion of money, and proportionately of the fiduciary issue. It ought to be better understood, and more often explained from the Treasury Bench, than it is.
May I, incidentally—and coming again to a point made by the hon. Member for Stoke-on-Trent, Central—say that the hon. Member's observation, anent the graph which so many of us have—that we might almost as well have done the exercise on the fiduciary issue as bother about Ml, M2 or M3—is very pertinent. Probably it is related to the fact that there is a fairly constant relationship between the cash requirement and the total money stock. Still, it is curious, and perhaps humbling, that this crude and visible evidence of monetary expansion seems quite adequately to obey the relationships which would be expected of much more subtle magnitudes measured with much greater difficulty.
The hon. Member for Blaby, having acknowledged, as we all acknowledge, that this antiquarian Order is no way for this House to control the immensely important factor of money, proceeded to ask where, then, this House ought to exercise control, for we would hardly say that we are successfully exercising it. Maybe we would have opted for inflation even if we were exercising control, but we all know that we did not opt. We all knew and know that we have not been exercising control. At what point, therefore, ought we to seek to exercise it?
Next week the Chancellor of the Exchequer will come forward with the revelation, only vouchsafed once or at most twice a year, of the anticipated net borrowing

requirement. But between the net borrowing requirement and the monetisation of debt, which lies at the fountain of the money stream, there lie quite a number of variables—and not only the variable of "V", velocity, which, I quite agree with the hon. Member, will not always remain as dormant as it has conveniently been for almost the whole of the time since the Radcliffe Committee hailed it as another version of infinity—including the ability of the Government, unforeseeable, as the hon. Member for Stoke-on-Trent, Central said, almost from one week to another, to borrow otherwise than from the banking system. That is another factor by which that gap is populated.
It seems to me that, if we are to seek to exercise a rational control, many ancient and hallowed conventions about what the Treasury will and will not discuss have to go by the board. We are all indoctrinated with this attitude, and every Financial Secretary to the Treasury is warned about telling people in the House of Commons anything about the prospects of borrowing money. "Why, we do not even dare to tell you", they say, "in case you might blab it out in the House of Commons. If those people in the House of Commons were to get to know, and it spilt out of the House of Commons into the outside world, Heaven help us. We might not be able to borrow at all, or at least we might be so gravely impeded in the secret processes—so complex, so expert, so top-hatted, that we could hardly bring an understanding of them to the comprehension even of the Financial Secretary—that all these processes might be reduced to ruin. So we had better say nothing about it."
All the year long, from one Budget to another, month after month, amid all the rumours of £3,000 million more or £3,000 million less, the Treasury, the Chancellor of the Exchequer and the Bank of England remain totally mum as to what is really going on. We discover only ex post facto, and long post facto, that they have been able to borrow, apparently, from the public and perhaps from the sheikhs on a far huger scale than they themselves had anticipated.
The correct answer to the crucial question which the hon. Gentleman posed lies somewhere in this area. If there is to be any control by this House over the


processes which cause inflation, whether we want it or not, and if, therefore, those processes are to be understood by those whom we represent—for our function is not least a function of explanation, of manifestation—these secret areas, these hidden realms of what is going on in the Government's finances, have to be exposed to parliamentary scrutiny and have to be continuously kept under review.
I am not convinced of this disaster which would follow if we were to know what the Bank of England knows about the way in which, from week to week and from month to month, the root causes of the expansion of money and, therefore, of inflation are moving, one way or the other. All the time, from one century to the next, the House of Commons, having got its grip on one aspect of government, then discovers that that aspect has lost its importance and it has therefore lost its grip upon government and goes searching for what really matters in the new era so that it can shift its grip into that area.
I hope that this debate, which is rather a historical one retrospectively, may also be a historial debate prospectively, in that from now onwards in our various ways—we have our channels and our methods in this House—we can resolve that, not in this formal, meaningless, ineffective way, but effectively by getting to grips with the upper end of the monetary mechanism and by insisting that this cannot be kept secret from the House of Commons, since it is of the essence of the monetary and economic experience of the nation, the House of Commons shall regain a power of control which it has lost.

2.44 a.m.

Mr. Ron Thomas: I agree with the closing remarks of the right hon. Member for Down, South (Mr. Powell) about this House and its lack of control or investigatory powers vis-à-vis the Treasury. I am one of those who find the working of the Bank of England and the Treasury to be completely outside any kind of democratic control or democratic inquiry.
I find that in the Bank of England's handling of sterling and the depreciation of sterling, which cuts living standards by hundreds of millions of pounds, there

does not seem to be any opportunity in this House to discuss reasons, to discuss who does it, the involvement of the Chancellor of the Exchequer in that, and so on. At the same time, I have found this debate very interesting. I hope that we will have a further opportunity to go into some of these arguments about what generates inflation in much more detail.
I listened to the hon. Member for Blaby (Mr. Lawson) with some interest. If he does not mind my saying so, I tend to think that he seems to have a faith in simple models of what does and does not create inflation. He mentioned, for example, the gold standard. As far as I can judge the studies I have read on this, they simply add up to a statement that the gold standard worked because it did not operate in the way that everyone said it would or should.
The hon. Member raised the question of credit creation prior to the changes which led to competition, and so on, in this area. Anyone who has studied economics knows of the simple model of the liquidity ratios of the banks and their ability to create credit 12½ times those liquidity ratios. I am one of those cynics who believe that that simple model was about as helpful as the simple model we had for the gold standard.
The right hon. Member for Down, South mentioned the Radcliffe Report on velocity of circulation. I am sure that we could have a long debate on that subject. I remind the right hon. Member, respectfully, that the Radcliffe Report also suggested that, within limits, however much we attempt to reduce the money supply, those who require the funds will get them from somewhere. As I remember the Radcliffe Report, it had a lot to say about trade credit and a reduction in money and credit supply in the general sense. I do not know whether people have suggested that expansion of M1 or M3 has anything to do with inflation. I get the impression that what people have said is that it does not play the kind of primary role that the right hon. Member says it plays.
Taking the difficulties of definition of what we mean by M1 and M3 and the difficulty of trying to predict in terms of velocity of circulation, which can change quickly, and bearing in mind what I have tried to say about Radcliffe


suggesting that other forms of funds, whether credit or loans between buyers and sellers would be found if we restricted the money or credit supply, we are not offered a valuable economic tool. I know that it will be said "OK. If you squeeze the money supply sufficiently something is bound to happen." It is a bit like the Phillips curve on unemployment. First, Phillips was telling us that 800,000 unemployed would reduce wage claims. Now I suppose that Phillips would tell us that it needs perhaps 3 million or 4 million. If we push it far enough and everyone is unemployed, I take it that wage claims will stop altogether.
I am glad that my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant) raised the question of the public sector borrowing requirement. If we are making a comparison between two periods I suggest that it is legitimate to up the public sector borrowing requirement in terms of inflation anyway.
We have a crazy, indefensible, economic capitalist system which is paying out £3,000 million or £4,000 million a year to keep people unemployed. It is strange that when the public sector—which accounts for between 42 per cent. and 45 per cent. of the gross domestic capital formation—borrows money to do it, it is regarded as wrong, but if the private sector borrows money everyone claps his hands. If we read tomorrow that ICI wanted to borrow £500 million to build a power station, everyone would say "Damned good show" and "Good luck to them." A high proportion of the public sector borrowing requirement is for capital investment. It is not legitimate to condemn that and to applaud it when it happens in the private sector.
I hope that we shall have a further oportunity to discuss monetary policy and its effect on inflation, because the mechanism of the relationship between the creation of money and inflation has never been satisfactorily explained to me. I can understand that when the pound is devalued by about 34 per cent., import prices, the cost of raw materials and production are pushed up. I can understand that firms work below capacity when unit costs rise, because of the capital they have to service. But I have never heard a satisfactory explanation of the mechanism of the relationship between the fiduciary issue and the level of

inflation—between credit expansion and the level of inflation, and of the effect on real resources, increases in imports, and so on.

2.54 a.m.

Mr. Nicholas Ridley: I add my congratulations to my hon. Friend the Member for Blaby (Mr. Lawson) who made his first appearance on the Front Bench, albeit it is April Fools' Day. I am certain that we will hear more from him from that position. I agree with everything he said in his excellent speech.
The debate has been mainly about monetary policy, with which I wish to deal. I must add a word of protest about the mechanism available to us to deal with the control of the fiduciary issue. Now that inflation has been running at much higher levels—it is going down now, but it may become much worse in the future—it is not satisfactory to pass an Order, at nearly 3 o'clock in the morning, allowing the Treasury two more years free of any control over the money it prints.
If we used that treatment for public expenditure—the idea of an Order every two years providing that the Treasury may spend as much over the Estimates it it likes, provided it obtains another Order in two years' time—it would not be control, and this is not control. The House was wrong to be lulled into accepting the procedure in the 1954 Act. It is necessary to think deeply about the question where the controls should lie. The right hon. Member for Down, South (Mr. Powell) said a certain amount about this.
One opportunity for control was provided by the debate on the Public Expenditure White Paper. The curious thing about that was that the Government were defeated, by a strange alliance of some who wanted public expenditure to be higher and some who wanted it to be lower, but nothing happened.
We must have some form of control. I believe that the Government are seeking more and more to have "take note" motions, and motions not directly giving control to the House. Control should start with an insistence on motions which have effect if passed, and with hon. Members using their votes to secure that they are passed; otherwise, we shall allow this


sort of sloppy procedural device to go through.
The Order is being debated on a sloppy procedural basis, because even if the motion were carried it would not control the fiduciary issue. It is just a statement of opinion that the Order should be withdrawn. It does not mean that it would be withdrawn if passed, or that the Order would have to be negatived, in any sense. It is not a control mechanism; it is simply a peg upon which to hang a debate.
The question how many notes are printed is often assumed to be almost irrelevant, because it is only one factor in the growth of the money supply. We are told that the number of notes that have to be printed is simply a matter of how many will be demanded by the public—that whatever they require we must supply. I am not sure that that is entirely true. I think that there can be some control on the note issue. I hope that the Financial Secretary will say something about the inter-relationship between inflation caused through the printing of notes and inflation caused through the extension of bank credit.
I imagine that the much greater use of cash for paying wages and contracts throughout society, in order to help people to avoid their taxes, is one of the reasons why the note issue is so high. If the hon. Member for Stoke-on-Trent, Central (Mr. Cant) studies the graph he will see that the tendency has been for the note issue to exceed the growth of the retail price index.
One of the things that frighten me is that it does not matter which candidate wins the Labour Party leadership election, because as far as I can work out their constituencies are equi-distant from the new Royal Mint, so that there is likely to be heavy pressure for extra employment in that area from the new Prime Minister, which could produce a much greater fiduciary note issue.
I come to the main argument about the relationship between the increase in the money supply and the way in which it causes inflation. I should like to answer the question of the hon. Member for Bristol, North-West (Mr. Thomas).
The right hon. Member for Down, South asked the Financial Secretary to explain the process. That was naive of

the right hon. Gentleman. One should never expect a Treasury Minister to explain anything. That is the last thing a Government would undertake to do. That would destroy their whole secret case, which the right hon. Gentleman described so accurately. I must therefore take it upon myself to explain this for the Financial Secretary, because I am sure that he will not do it for us.
If, today, the Government require £50 million because their expenditure is heavier than their income, they must seek to borrow what they can. Perhaps they borrow £10 million. They borrow the net deficiency of £40 million from the banks, giving the banks an IOU of some sort in exchange. They spend it. The money goes to every sort of person, all over the economy—to teachers, road builders, suppliers of weapons, civil servants. They either spend it in shops or they bank it. If the former, the shops bank it. Wherever it goes, it is banked. Within 48 hours that £40 million has found its way from the banks to the Treasury, back into the private sector and back into the banks again.
So the banks are no worse off. The £40 million they gave to the Government has come back into the banks and, in addition, they have a piece of paper which says, "IOU £40 million: Signed Denis Healey." Upon that they may then extend credit to the private sector to an equivalent amount, depending on the ratio. That is the answer to the hon. Member for Bristol, North-West.
Whether we consider our present system of credit extension, or the printing of notes, or the cutting of corners off gold and silver coins—which is how it was done in Roman times, and earlier—we see that this has been a standard practice throughout all history. The method adopted is a mere technicality.
We cannot stop inflation by controlling the money supply, simply because the causes of inflation are infinitely more political and deep-seated than some mere technical device. The technical mechanism is easy to understand, but it is not part of my case that simply by not doing this in some curious way one can succeed. First of all we must face the fact that on that day £40 million is going out which does not exist. That is the cause of inflation. It is not the fact that the credit base has to be extended. The


cause of inflation is trying to use resources that do not exist.
I do not know what the hon. Member for Bristol North-West did a fortnight ago on the public expenditure White Paper, but I suspect that he may have been one of those who did not give it his full support. Perhaps he would like to keep quiet about that; we can always look it up. But whatever his position, it was the hon. Members who sat on the Government Benches that night who voted for a higher rate of inflation. It was Opposition Members who tried to say that the expenditure was too great—who were voting for a reduction in inflation.

Mr. Ron Thomas: There still seems to me to be a gap left. When we talk of inflation we mean rising prices. [HON. MEMBERS: "No."] We do not mean rising prices? If this £40 million is coming out and prices do not alter or fall, we have an inflationary situation. I always thought that inflation was defined as rising prices. I wonder how the extra £40 million the hon. Member spoke of has pushed up prices?

Mr. Ridley: The problem is that inflation is not rising prices but falling value of money—the price of an article going up with the depressed value of money. The gap arises from the extra credit created at the bank which is used by people to buy things, thereby putting up the price because there is more money about.

Mr. Durant: Does my hon. Friend agree that the IOU for £40 million is also used by the Government again?

Mr. Ridley: I do not entirely agree with that, except that they do this every day—but perhaps we shall hear the Financial Secretary's comments on that situation, although I doubt whether those comments will be as full and as frank as mine.

3.7 a.m.

The Financial Secretary to the Treasury (Mr. Robert Sheldon): I had hoped to be as full and as frank as time permitted, but the time available is not enough to do as much as I should like, let alone as much as hon. Members opposite would wish. I shall start by saying something

about the fiduciary issue. [HON. MEMBERS: "No."] I understand that reaction, but for the sake of the record and for hon. Members who may follow the example of the hon. Member for Blaby (Mr. Lawson) in looking up references in Hansard, one or two comments should be enough.
First, I congratulate the hon. Member for Blaby on his first appearance at the Dispatch Box. It is fitting that he should be talking on this subject.
The only thing that I want to say about the fiduciary issue is that, as I see it, it is there merely to reflect the demand of individuals and companies for the cash they require. If authorisation were not to be given in the way that the Order provides, and the bank notes consequently were not made available, that cash would be made available in other ways. Cheques would circulate instead of cash and their mechanisms would bypass the ordinary mechanisms we have. It is a fitting comment that banknotes have been called the small change of the monetary system. That is what they are. There used to be gold in the Issue Department before the war to back part of the note issue, but now all the gold is in the Exchange Equalisation Account and the fiduciary issue is to all intents and purposes equal to the total note issue.
That is all I wish to say on fiduciary issue, because I see from the comments of the hon. Member for Blaby, where he brought into play the comments of Lord Boyd-Carpenter, that he sought some respectable justification in the analysis of policy which Lord Boyd-Carpenter, when he was Financial Secretary, gave, in calling for a wider debate on these matters.
I might start by saying something about the various definitions of money. M1 was not mentioned much, and I was a little surprised, because, after all, it was the right hon. Lady the Leader of the Opposition who, on one occasion in particular, referred to poor figures in M1 in one quarter and based her comments on that. I am sure that the hon. Member for Blaby is more sophisticated in his economic knowledge and understanding of these matters than she was on that occasion, and this discussion has been largely based on M3, with one or two comments on M2.
I did not hear many comments on Ml, and for very good reason. Although it represents money in its most tangible form, that is not enough, and M3, which represents notes and coin plus bank deposits in general, is a much better guide to money supply. The Conservatives have been casting anxious looks at the way in which we restrict the definitions of money to these one or two methods of computation. M2 should be excluded. It is unrealistic to leave out deposit accounts in general, and once that point is passed it will be difficult to draw the line.
I was surprised that my hon. friend the Member for Stoke-on-Trent, Central (Mr. Cant), whom I always respect in these matters, did not discuss the merits of M4 and M5, but there are difficulties here. Clearly the deposits in building societies and trustee savings banks have their effect, and it is difficult to find one measure of monetary stock to meet all requirements. M3 is probably the best we shall have for quite a while, although I note its limitations.
The hon. Member for Blaby talked about the high level of the public sector borrowing requirement and the difficulty of making room for investment. We had a discussion on this in the debate on the public expenditure White Paper. One of the main reasons for the reduction in the increase in public expenditure is to make room for that level of expenditure in investment. That point, as it applies to a number of other factors, will be discussed in the Budget Statement and in the debates upon that statement next week.

Mr. Lawson: What are the Government's monetary objectives in the sort of terms that the Federal Reserve is required by law to spell out in the United States'.' As the hon. Member for Stoke-on-Trent, Central (Mr. Cant) said, it would be highly desirable for this to be revealed.

Mr. Sheldon: I find it difficult to make the kind of comparison with the United States that many others seem to make so readily. Our system is different, but in terms of the objective—no doubt my right hon. Friend the Chancellor will be dealing with this next week—there are no fixed rules—[Interruption.] If hon. Gentlemen want fixed rules they must

accept a fixed indicator, too, to provide the definitions they want. I have tried to point out the deficiencies of these various indicators. There are no fixed rules determining the maximum growth in the money supply which is compatible with avoiding inflationary pressures. As my right hon. Friend said in his Mansion House speech in October 1975:
However, I would not want to see that growth over any sustained period exceed the rate at which money GDP was increasing.
This is what has been happening. In the period February 1975 to February 1976, M3 grew by 9 per cent. That is well below the increase in money GDP. From February 1973 to February 1974, M3 grew by 27 per cent. That was the printing of money which was universally deplored, not least by my right hon. Friend the Prime Minister.

Mr. Lawson: Not at the time.

Mr. Sheldon: The printing of money takes a little time to permeate the consciousness of us all. I do not think that anyone knew precisely at the time that money was being printed.

Mr. Ridley: Mr. Ridley rose—

Mr. Sheldon: The hon. Gentleman took up so much of my time that, as I have only three minutes left, I shall not give way to him. A number of questions were put to me. Therefore, I think that I have at least the right of reply and perhaps the chance to answer some of those questions.
The right hon. Member for Down, South (Mr. Powell) asked for some simple definitions. One such attempt was made by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). I shall attempt another. My definition or explanation of the process of printing money is that the money is provided by the banks in the form of loans. The Government allow the banks to lend money—and in effect that is printing it—by borrowing from the banks the residual amount needed to finance the public sector borrowing requirement. Looking at the monetary theory, we see a whole dependence on liquidity and the relevance of it to spending decisions.
The definition is concerned with what constitutes liquidity. We know that people with money in their pockets tend to spend more than if they have little


money in their pockets. The precise relationship between people's spending and the amount of money they have in their pockets and in their banks and reserves is a complex matter. We are discussing some sociological phenomena of extreme importance, and there is difficulty in understanding the connection in the way propounded by my hon. Friend the Member for Bristol, North-West (Mr. Thomas).
I think that we are all, to a greater or lesser extent, convinced by the monetary theory in so far as we believe that the amount of money we possess has some influence on our actions. There are those who are divided on the one side by the knowledge of this influence, but who are unable to ascertain the precise relationship which others see more readily and base their theories upon.
The hon. Member for Blaby asked for a definition of the mechanism between the creation of money and inflation. The only definition that I can give is the one that I have attempted so far—the one which guides Government policy—which is to increase the level of money stock in broad line with the increase in money GDP. I do not think that I can go very much further than that.
The hon. Member for Cirencester and Tewkesbury said that the public expenditure White Paper was "a sloppy procedural device". I have given my interpretation of that device on a previous occasion. These are matters for the House to decide.
The right hon. Member for Down, South talked about the difficulty of controlling even the note issue because of the way in which we organise our procedures. I take note of the fact that the Government are setting up some examination of our procedures, from which we shall be hearing in due course—
It being one and a half hours after the commencement of proceedings on the motion, the debate stood adjourned.

EDUCATION (SCOTLAND) BILL

Order for Second Reading read.

Motion made, and Question put forthwith pursuant to Standing Order No. 67 (Public Bills relating exclusively to Scotland), That the Bill be committed to a Scottish Standing Committee.—[Mr. Robert Sheldon.]

Question agreed to.

Mr. Ridley: On a point of order, Mr. Deputy Speaker. Will you be putting the Question on the Fiduciary Note Issue Order?

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): No. Under the Order of the House the time had expired. There is no Question to put.

EDUCATION (SCOTLAND) [MONEY]

Queen's Recommendation having been signified——

Resolved,
That, for the purposes of any Act of the present Session to make further provision with respect to school commencement and leaving dates and the supply of milk in schools, it is expedient to authorise the payment out of moneys provided by Parliament of any increase in the sums so payable in respect of rate support grant under the Local Government (Scotland) Act 1966 which is attributable to any provision of the said Act of the present Session.—[Mr. Robert Sheldon.]

PETITION

Kyle Ferry, Skye

Mr. Russell Johnston: With your permission, Mr. Deputy Speaker, and that of the House, I wish to present a petition, signed on behalf of the Broad-ford Branch of the Scottish Women's Rural Institute on the Isle of Skye by four ladies—Ola Robertson, Catrina MacDougall, Mary Campbell and Lucy Sanderson-Taylor. The preamble to the petition reads as follows:
To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, the Humble Petition of Residents of Broadford.
The petition sheweth
That the Kyle ferry being the main route to the Island of Skye, is run at the exorbitant


charge of 95 pence per car, with additional 10 pence for the driver and 10 pence for each passenger in the car, for a five-minute crossing. Such a charge inhibits residents from visiting families and hospitals, and from attending educational, recreational and community events, which are linked with the mainland. While the islanders suffer the imposition upon them of extra-high prices on all goods and supplies because of increased transport charges, these ferry charges also, by deterring visitors from tours and holidays on this beautiful island, ensure that there is a decrease in income for them.
Wherefor, your Petitioners pray that the Kyle Ferry should be freed from this exorbitant charge.
And your Petitioners, as in duty bound, will ever pray, etc.
Those are the formal words, but they represent bitter discontentment on the part of the people of Skye and many visitors to the island. The ladies who signed this petition organised a similar petition, which attracted 13,000 signatures. High ferry charges directly affect everyone on the island, and it is felt that this ferry, which is owned by the State, makes a considerable profit out of raising the cost of living, and that its fares should at least be reduced or, at best, removed.
With your permission, Mr. Deputy Speaker, I shall deposit the petition in the Bag.

To lie upon the Table.

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dormand.]

MOTOR VEHICLE TESTS

3.22 a.m.

Mr. Greville Janner: Perhaps this is an appropriate hour to raise the question of the MOT testing of motor vehicles, because even at this time hon. Members of this House are going home in their cars, which I trust have been tested. I also trust that they do not expect too much of the tests that the cars have received. There are dangers in the testing of motor vehicles which are so great that it is vital that the House should indicate its anxiety. I hope that my hon. Friend the Minister, who has been good enough to stay up together with me in order that this matter may

be ventilated, will be able to give some assurance which will set many anxious minds at rest.
First, the passing of an MOT test does not mean that a car is roadworthy. There are far too many drivers who believe that when they have had their vehicle tested, it is necessarily roadworthy and fit to take on the road. I believe that the Department itself should make it plain that the test is a limited one—perhaps that brakes are in order and the steering is satisfactory; that at least we know that the tyres are adequate and that the lighting is effective. But the existence of defects in the chassis or in the motor which would make the vehicle unsafe or unable to be driven along the road would not appear from the test.
Second, those who buy motor vehicles should understand that the MOT test is not in any way a guarantee of roadworthiness. I suggest that the time has come to ban, in advertising for the sale of vehicles, reference to the fact that they have been MOT tested. Far too many people in their patent honesty and simplicity believe that my hon. Friend's Ministry is thereby guaranteeing that the vehicles are safe.
Third, I ask my hon. Friend to consider whether it would not be appropriate for a windscreen decal to be placed on vehicles in the same way as a licence, so as to indicate when the test was satisfactorily carried out. That would allow the police to see at a glance whether a vehicle had been tested. With all the faults that the test has, at least it is a guarantee that certain essential parts of a motor vehicle have been checked out and apparently work. That is a great deal better than nothing. That, at least, is some protection for the public. It shows that certain parts are apparently in working order.
Recently, the editor of Motor Trader, a leading trade publication for which I have been writing an occasional legal column for some years, took me to a testing station. I watched while a carefully prepared brake shoe with a lining shaved down to a mere fraction of an inch was placed on a vehicle. The vehicle was then tested to see whether its brakes were in order. It passed the test with flying colours, although it was apparent to everyone that if the vehicle had been


taken on the road it would have become a machine of potential death within a matter of miles.
The test cannot be a guarantee even in respect of the limited number of items that are tested. I believe that there are at present far too many testing stations. Originally the expected number was quite modest but today it is very high. If the number were reduced I believe that the standards required would be higher. If the equipment demanded were more carefully specified the public would get a better service. However, I pay tribute to the testers. When we consider the large number of tests and the very high percentage of failures, and when we consider the way in which the garage trade is attacked, so often so rightly, it is remarkable that so very few successful complaints are laid against testers.
The people who are at fault are those whose cars are tested and who then discover that there are defects but do not heed the advice that they are given by the testers to have those defects repaired before the vehicles are taken back on the road. At present a tester has no power to require a motorist not to drive a dangerous vehicle on to the road from whence it came. Here lies a grave and unacceptable danger.
My right hon. Friend the Secretary of State for the Environment replied to a Question of mine on Friday of last week. I asked the Minister to give the reasons for various failures. Out of 12,606,900 motor cars tested in 1975, 32·5 per cent. failed—in other words, 4,435,450. No less than 21·1 per cent. failed because brakes were defective; 1·5 per cent. had brakes so bad that the vehicles concerned were not fit to be taken out on the road; 18·4 per cent., or 1 in 5, had defective steering, which made the vehicles unfit to drive; 7·5 per cent. had defective lights; 6·2 per cent. had defective seat belts. There were similar results for light goods vehicles and motor cycles.
Yet in every case we know that vehicles with defective brakes, lethal steering, suffering lighting defects, defects in tyres, or without seat belts, went back on the road. Some were taken home to be fixed, some were taken to garages to be fixed, and some were taken out and shuttled around from testing station to testing

station in the hope of eventually finding one that would grant the desired certificate, perhaps so that the vehicle might be sold.
In my view, Motor Trader is carrying out a considerable public service by spotlighting defects in the present system. I wish publicly to express my thanks to its editor, Mr. Bryan Cambray, for providing so much of the material necessary for me to mount the campaign in this House to have the testing tightened up, and in particular to deal with this strange anomaly, as a result of which vehicles which are found to be dangerous can still go straight back on to the road and remain a potential menace to road users, and especially to the drivers of the vehicles concerned.
I ask the Minister in his reply to say what the Government intend to do to deal with this anomaly. I hope that he will be able to give an assurance to the House that he will see that steps are taken to deal with the situation. I appreciate that it costs money to improve the test, but the test is there to save lives, and lives cost money. I appreciate that there are difficulties in the way of improving matters, but I do not see why the test should not include looking for a statutory mirror. It has been said that there will be a statutory requirement for two mirrors. It would surely not take any longer than 10 seconds for the inspector to note down that fact.
What I am attempting to achieve is in no way intended to make life more difficult for the motorist in general, or to hamper the do-it-yourself motorist. I believe that we should encourage people in every way to look after their own vehicles and to look after them well. But it is lunacy for the Government to tell me, as they have in answer to parliamentary Questions, that if a person drives a vehicle out from a testing station when it is defective he may be prosecuted. We know that that happens, and knowledge of prosecution is not sufficient to keep vehicles off the road. Every testing station should have facilities with the aid of which a do-it-yourself operator can fix his motor car and put it in a safe condition. Every station should have means of fixing a vehicle that is found to be defective. No testing station should allow a vehicle that is not fit to be used on the roads to leave the station where it is tested.
The test is a great advantage to those who use our roads. It is a safety measure of the highest order, but it can be greatly improved. I hope that my hon. Friends, who are well known for their deep concern for road users and road safety and for the time, thought and care they have given to this subject, will use this occasion to announce measures to improve the test and the knowledge which the public must have of the limitations of the test in its present form.

3.35 a.m.

The Under-Secretary of State for the Environment (Mr. Kenneth Marks): I am grateful to my hon. and learned Friend the Member of Leicester, West (Mr. Janner) for raising this subject—a subject on which he has been campaigning in recent months. I see that he has asked more than 50 Questions on this topic since the beginning of the Session.
The subject—the annual inspection of motor vehicles as part of our policy of ensuring that all vehicles are maintained in a roadworthy condition—is one that most hon. Members would support.
My Department is vitally concerned with road safety and I am always seeking ways of reducing the tragic toll of road accidents, which cost the nation so much in human suffering. To this end, we keep the road safety policy under constant review to ensure that it most effectively utilises the resources available for this important work.
I welcome this interest in the MOT test, because it is an important part of our road safety policy which benefits from public scrutiny. However, like many other worthwhile subjects, it is tempting to press for improvements without proper regard to the objects served, and the cost of the improvements or the real benefits that the improvements would bring. I am therefore grateful to have this opportunity to explain the rationale of our policy.
I take note of my hon. and learned Friend's suggestion of including a provision for a notice giving the date of the last test to be displayed on the car windscreen. Another hon. Friend has suggested that insurance details should be displayed on windscreens, but the main purpose of windscreens is to protect occupants from wind and to give

adequate visibility. We discourage people from blocking their windscreens. I also note my hon. and learned Friend's suggestion that examiners should ensure that the vehicles have mirrors as well as seat belts.
I must emphasise that statutory testing does not and, indeed, cannot guarantee the continued roadworthiness of a vehicle. This is the continuous responsibility of the owner and the driver, who should ensure that at all times their vehicle satisfies the requirements of those Regulations which specify standards for the construction and use of road vehicles.
Statutory tests have been introduced to provide a periodic check of the general way in which that responsibility has been discharged; but just because they are periodic while the need for maintenance is continuous they cannot supersede that responsibility. In a perfect world testing would be unnecessary, for owners and drivers would ensure that their vehicles were always roadworthy. Unfortunately, it is plain that we cannot rely on this and some check is necessary. The question is, how much and how often?
The more comprehensive and frequent the test, the more it will cost. The scale of the problem is large: to add one minute to the MOT test will cost about £1 million per year. This all comes out of the motorist's pocket, at a time when he has been hard hit in many other areas.

Mr. Greville Janner: Can my hon. Friend tell the approximate cost to the Government of road accidents caused by defective vehicles?

Mr. Marks: I cannot give my hon. and learned Friend that figure offhand, but I shall let him have it.
Our task, therefore, is to achieve due balance between the cost which the test incurs and the benefits to road safety that are derived from it and to relate this to the other road safety measures which compete for the not unlimited resources available for this work. These are the reasons for limiting testing to those items that are most critical for safety and for having separate schemes for the three main classes of vehicle, that is, cars, vans and motor cycles, lorries and buses, in which the test requirements are progressively more stringent as the size and passenger capacity or load of the vehicles increases.
The MOT test, which caters for cars, vans and motor cycles, originally covered the three most critical safety items on a vehicle—brakes, steering and lights. To these were added tyres and seat belts, and this year will see the inclusion of windscreen washers and wipers, stop and direction indicator lights and the condition of the exhaust system, together with a clearer definition of suspension and corrosion defects as part of the braking and steering items. The test requirements involve examination of the vehicle and the measurement of performance where this is possible—that is, for brakes and lights. It does not involve dismantling parts of the vehicle, which would greatly increase costs without a commensurate return in accident saving.
As a cost-benefit check on the critical safety items of a vehicle, I believe that the MOT test makes an effective contribution to road safety; but in seeking to improve this effectiveness I must not overrate the benefit of more elaborate testing, thus producing a situation in which the cost of testing is greatly increased with no discernible improvements in road safety.
So much for the general background, I now come to the specific points raised by my hon. and learned Friend. He referred to the prohibition of dangerous vehicles. The best means of dealing with vehicles which fail the MOT test is a matter that is receiving consideration at the moment by my hon. Friend the Minister for Transport. The person who drives such a vehicle is in a vulnerable position, for he may be leaving himself open to a charge of driving an Unroadworthy vehicle, or a much more serious charge if he is involved in a road accident. He is also taking an insurance risk, in that he may not be covered because he is not meeting his obligation to keep his vehicle in a roadworthy condition.
In some cases the test shows that the vehicle is not only defective but dangerously defective. This raises the question whether the authorised examiner should be given the power to prohibit the use of vehicles. Such a power is part of the heavy goods vehicle testing scheme, where it is exercised by the technical officers of my Department, who hold examiners' warrants and have no overt commercial interest influencing their

decision. With fewer than 100 testing stations their judgment can be exercised at a reasonably consistent level.
The same cannot be said for the MOT test scheme. There are about 17,500 test stations and about 60,000 nominated testers who do the testing. Consequently, the problem of establishing and maintaining consistent standards would be very great. An even greater problem would be the difficulty of convincing vehicle owners that a prohibition is not motivated by the desire to drum up business. Even if untrue, this possibility is bound to harm relationships and adversely affect the public's view of the test.
In general, I think it can fairly be said that motorists act in a reasonable way and either have their vehicles repaired by the authorised examiner or drive with proper care to another place of repair. I do not feel justified in imposing prohibitions that would bear harshly upon the many reasonable as well as the very few unreasonable motorists. Nor do I support the introduction of a follow-up procedure which would ensure that these vehicles were repaired or scrapped; the need to have a current MOT certificate ensures this.
Although it is difficult to be precise about the contribution of any single measure or even group of measures to road safety the fact remains that we have much to be proud of. Over the last decade the road casualty rate has fallen by over 45 per cent., and in my view roadworthiness tests have made their full contribution to this improvement. Whilst there is still much to be accomplished, the fact is that we have a road safety record second to none.
Many countries have comprehensive roadworthiness testing schemes similar to our own. The main variation is the type of test station for private vehicles where many countries use Government or Government agency stations, but I feel our system best suits our conditions.
The main point I want to get over is that the MOT test, or for that matter any periodic test, cannot guarantee the complete roadworthiness of a vehicle. This is and must be the continuous responsibility of the motorist. It is one that I believe is usually carried out responsibly and well.
I am not dismissing lightly the points made by my hon. and learned Friend, who I know has the interests of vehicle roadworthiness very much at heart. He shares with me, and I am sure with every hon. Member, the desire to ensure that every vehicle is at all times and in every respect fit to travel on our roads. However, in pursuit of this objective I must be satisfied that the total cost of any enforcement measure is justified in terms of the safety benefits that will be derived from it.
I shall look into my hon. and learned Friend's proposals with care. The suggestions he has put forward by means of parliamentary Questions are also being

looked at. But I must conclude that, in the main, the present testing standards and arrangements, with the additions and modifications already announced, are those best suited to our needs, though we shall continue to examine the points he has raised.
I thank my hon. and learned Friend for his concern and promise him that any new measures that he or any hon. Member can suggest which will improve road safety will be looked at very carefully.

Question put and agreed to.

Adjourned accordingly at fourteen minutes to Four o'clock a.m.